ExecutivePay posts
FeedPosted Jul 23rd 2009 9:20AM by Mark Fightmaster (RSS feed)
Filed under: Goldman Sachs Group (GS)
Who is ready for their morning dose of anger? That is what I thought this morning when I found out about the higher pay at some investment banks following the recent bailouts. Well, let me qualify that -- it isn't necessarily higher pay, but some execs will receive the same amount as they did before the bailouts. Some Wall Street firms, enjoying improving profits are on track to "pay employees as much as, or even more than, it did in the pre-crisis days." The top six U.S. banks have set aside $74 billion to pay employees, up from $60 billion last year, according to the Washington Post.
Continue reading Wall Street pay is higher than pre-crisis levels
Posted Jul 17th 2009 3:20PM by Zac Bissonnette (RSS feed)
Filed under: Management

The Obama administration proposed legislation yesterday that would require fully-reporting publicly traded companies to give their shareholders a
non-binding vote on executive compensation. Under the proposal, directors would have to ask shareholders what they think before going ahead and doing what they were going to do anyway.
Administration insiders
predicted that the measure would pass Congress easily, but that isn't stopping the Chamber of Commerce and the even more infamous Business Roundtable from opposing the measure.
Why would anyone what oppose a non-binding vote is beyond me. Why are they so opposed to taking a straw poll of their shareholders to find out what they think about their pay practices? Why are they so opposed to companies soliciting the opinions of their shareholders?
If anything, this measure doesn't go far enough. What's needed in the boardrooms of America is a revolution -- where shareholders take back their company from lazy, incompetent and just plain crooked directors who bankrupted General Motors, sent
Bank of America (NYSE:
BAC) onto the welfare rolls, and turned
American International Group (NYSE:
AIG) into America's most degenerate gambling addict. And non-binding resolutions will lead to a non-binding revolution, which is really no revolution at all.
Posted Jun 10th 2009 4:15PM by Zac Bissonnette (RSS feed)
Filed under: Management
President Obama and Treasury Secretary Tim Geithner have selected Washington lawyer Kenneth R. Feinberg to serve as the executive pay czar. Feinberg will be charged with setting pay standards for top executives at the seven companies that received the most bailout money.
The New York Times reports that "For 80 other financial institutions that have received federal assistance, Mr. Feinberg will develop the overall compensation structure, but without setting the exact level of pay. For these 80 companies, the goal is to reduce excessive risk-taking by executives whose compensation is tied to company performance. Mr. Feinberg will also determine whether it would be in the public interest to force any executives at companies receiving assistance who might have been overpaid to return some pay."
Continue reading Obama picks a Washington lawyer to set executive pay standards
Posted Jun 5th 2009 12:10PM by Zac Bissonnette (RSS feed)
Filed under: Law

The Securities & Exchange Commission may force public companies to disclose more information about how they compensate their lower-ranking employees, but there's a catch: They still wouldn't have to say how much they're paid.
The Wall Street Journal reports (subscription required) that "The Securities and Exchange Commission plans to propose that companies disclose in general terms how they compensate lower-ranking employees, expanding disclosures for the first time beyond the executive suite."
Continue reading SEC may force companies to disclose pay of lower-ranking employees
Posted May 1st 2009 8:00AM by Mark Fightmaster (RSS feed)
Filed under: Microsoft (MSFT), Yahoo! (YHOO)

After the closing bell sounded yesterday afternoon,
Yahoo! (NASDAQ:
YHOO) announced that its executives received bonuses that came in at half of their targeted range for 2008. The year was a "trying year," thanks to a falling stock price and an unsolicited takeover bid from
Microsoft (NASDAQ:
MSFT).
As for the specific payouts, former President Sue Decker (who departed YHOO in January) received only $600,000 in bonuses for 2008. This payment does not include YHOO's payment of $23,000 for Decker's "car services" during the year. YHOO's CFO Blake Jorgensen (who will depart when the company finds a replacement) received $250,000 in bonuses during the year.
Continue reading Yahoo! executives receive smaller bonuses
Posted Apr 6th 2009 5:00PM by Zac Bissonnette (RSS feed)
Filed under: Management

Widespread outrage over abusive executive pay practices has some companies going to unusual lengths to gain shareholder support for the way they compensate their top earners.
Amgen, Inc. (NASDAQ:
AMGN) has
invited its shareholders (subscription required) to fill out a ten question online survey assessing the level of executive pay, the clarity of proxy statement disclosures related to compensation, and how well pay practices are aligned with performance and shareholder value. Other companies are instituting similar programs, and more are expected to follow.
Continue reading CEOs to shareholders: Do you think I'm overpaid?
Posted Mar 19th 2009 12:40PM by Zac Bissonnette (RSS feed)
Filed under: Management, Law, Amer Intl Group (AIG)

While American politicians whine self-righteously about corporate governance travesties at bailed out companies they had every opportunity to extract concessions from, Australia's government is actually taking steps toward long-term improvements in executive pay practices.
The
Wall Street Journal reports that "Treasurer Wayne Swan said the center-left Labor government will amend the Corporations Act to require shareholder approval for any termination payments that exceed average annual base salary, which excludes additional compensation such as shares or stock options."
Continue reading Australia clamps down on CEO pay the right way
Posted Mar 9th 2009 2:40PM by Zac Bissonnette (RSS feed)
Filed under: Management

With outrageous and undeserved pay packages gaining unprecedented attention at shareholder meetings this year, some activist investors are taking on one of the most egregious perks of the executive suite: "golden coffin" payments made to the estates of executives who die.
My favorite example is
Nabors Industries (NYSE:
NBR) which will have to
pay the estate of 78-year old chairman an astounding $263 million if he kicks the bucket.
But today's
Wall Street Journal reports (subscription required) that some activist investors and pension funds are taking on these death benefits this proxy season, with a pretty good argument: Paying executives large bonuses for dying is the polar opposite of pay-for-performance -- although a crass person might argue that
General Motors (NYSE:
GM) would be in much better shape had it paid CEO Richard Wagoner a couple hundred million to take a dirt nap a few years ago.
Continue reading 'Golden coffins' getting a second look
Posted Mar 4th 2009 11:40AM by Zac Bissonnette (RSS feed)
Filed under: Management, Bank of America (BAC)
Bank of America (NYSE:
BAC) Ken Lewis' compensation fell by 80% in 2008 as the company's stock declined by 66% and a pair of just plain stupid acquisitions primed the company for an even greater fall. In 2008, Ken Lewis took the steps that transformed one of the most powerful financial institutions in the world into a welfare diva, narrowly avoiding nationalization by sucking at the nipple of Uncle Sam. Either way, shareholders have all been wiped out.
Aside from not paying Lewis a bonus, what did Bank of America's
compensation committee have to say about all this? "Regardless of our profitability and continued progress and growth, our performance for 2008 did not meet our expectations, including a loss for the fourth quarter."
Continue reading Bank of America compensation committee can't muster much criticism
Posted Feb 4th 2009 9:40AM by Peter Cohan (RSS feed)
Filed under: From the boards, Management, Financial Crisis
Can President Obama force CEOs to take a massive pay cut? While many others in the economy -- particularly the millions of regular Joes and Janes who have lost their jobs -- are helping to push down wages, CEOs have been immune from the pay cuts. But if Obama forces CEOs who take government money to limit their pay to $500,000 -- 25% more than Obama takes in -- will that cause all CEO pay to tumble? I think the answer is "no."
Why? Many reasons. First, no CEO in his or her right mind would volunteer to take government money given the ensuing pay cut. For example, if the CEO of a car company made $14 million in 2008, why would that same CEO volunteer to make $500,000 in 2009? Instead, the CEO would seek a position with a company that did not take government money and therefore did not limit the CEO's pay.
Continue reading CEO pay in a deflationary spiral?
Posted Jan 29th 2009 11:15AM by Peter Cohan (RSS feed)
Filed under: Employees, Economic data, Financial Crisis
Just when you think you've heard it all, you hear more. In the last year, Wall Street -- or more specifically, the brokerage units of New York financial companies -- lost $35 billion. (Worldwide, financial institutions have taken $1 trillion in write-offs of bad assets). Those firms received a large proportion of the $350 billion TARP and persuaded the Treasury to guarantee losses from hundreds of billions worth of their financial toxic waste. Their reward? $18.4 billion in bonuses.
How much of the TARP went to paying for those bonuses? The banks have cleverly neglected to report that. But let's face it -- money is fungible. So if they did not use the money from the deposits they received from the Treasury to pay bonuses, our tax dollars freed up cash they may have had from other sources that did go to paying those $18.4 billion in bonuses.
Continue reading Wall Street loses $35 billion in 2008, uses TARP for $18.4 billion bonus
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