Accountability-Central.com
Register here.  Forgot your password?  Remember me
HomeAbout The SiteRegistration InformationVoices: Featured Commentators and Bloggers  Special Sections
Search

Categories:

Featured Content


Slide10

Slide10

Slide10

Slide10

Slide10


NewsAndInfo

 



Click Here to Subscribe to our RSS Feed
 



Stories Below come from our Media Partner 3BL Media - Click their logo or any of the stories for more information


Executive Compensation, Trends, Executive Compensation Survey, Plans

Executive Compensation Introduction

Updated January 2011

The issues surrounding executive compensation – and especially CEO pay -- have been the topics of much discussion in Board Rooms,  at Annual Shareholder Meetings and in the media, After a decade of intense debate, efforts to control executive compensation ((under Federal Law)  took center stage when the U.S. Department of the Treasury issued interim final rules for reporting and recordkeeping requirements under the executive compensation standards of the Troubled Asset Relief Program (TARP) in January 2009. For the first time, the Federal government was taking a role in setting the compensation at private corporations.  The actions resulted in an appointment of an Executive Compensation Czar within the Treasury Department to review compensation packages for companies receiving Federal assistance.

The effort did not stop here; further regulations are to follow with the enactment of the Dodd -Frank Financial Reform Legislation adopted in the Spring of 2010.  This comprehensive package of “reforms” is now the focus of new regulations (that have to be developed implementing rules of the road). Unless the 112th Congress repeals parts of the law dealing with exec comp, the Federal government will have some kind of role in the issue.  This has been welcomed by activist investors concerned about executive compensation policies and practices, especially at under-performing companies with outsized exec compensation.

In the worst cases, the focus of executive compensation packages has been upon corporate boards that are accused of being unrealistic, indifferent and in collusion with CEOs.  What became the worst criticism was the revelation that too many agreements did not tie compensation with company performance.  

“Say-on-Pay” became the rallying cry of shareholder groups and social and proxy activists as the hammer and anvil were hot and ready for hammering out reform. The Securities and Exchange Commission enacted rules for publicly-held companies to finally give a voice to shareholders through the proxy process on executive compensation.  While the votes are not binding, they do serve to create an atmosphere of greater transparency and accountability of corporate boards to their shareholders.

Still the debate over the rules goes on; matters related to CEO compensation will continue to be the focus of this section.  Whether you are located in the “C” suite or are a Corporate Secretary, Board Member, Investor Relations professional, shareholder or activist, Hot Topics Executive Compensation should be a daily stop for news, commentary and research.  

 Note:  The Editors form no judgment about the level of pay and specific compensation of Chief Executive Officers and others in the “C” Suite.  The purpose of this section is to fully air the issues surrounding exec compensation issues at shareholder-owned companies.

----------------- 

February 2008

How much should a CEO or the top executive officers of a publicly-owned corporation be paid?  What is a “fair” compensation?  Especially when corporations are laying off thousands of workers and outsourcing work to distant lands?  When the middle class is under attack – see CNN Lou Dobbs’ commentary on this?  The issue of exec comp has become a burning question with an array of forces on all sides of the issue.  When the stock market is doing well and “all boats are rising,” the issue is not as much in focus as when companies (or a single firm) is underperforming and the executive compensation is seemingly out of whack.  Out of control. Disproportionate to performance.  Unrelated to reality.  And other battle cries by investor activists, public officials, journalists, advocate organizations, etc.

Consider the case of Home Depot, where the share price fell as the CEO’s pay package rose.  Saying goodbye to the CEO, Mr. Nardelli, cost HD more than $200 million.  Consider the exiting of the Wonderful Wizards of Wall Street, and their departure comp packages – totaling in the hundreds of millions’ of dollars – as the wreckage they’ve left behind (in the form of sub prime disaster loan portfolios) causes real pain on Wall Street, and on Main Street.  We still don’t know the damage they caused with their financial wizardry – but the carnage is felt when home foreclosure rates increase dramatically, as they have over the past year.

So – what is a fair price for the Top Man (and a tiny handful of Top Women)?  You’ll find news, commentary, research and other useful content here in this Hot Topic subsection of Accountability Central, as well as in various content sections and subsections.  (See Corporate Governance, Shareowner Activism, Socially Responsible Investment, and other silos.)

Consider this as you formulate your own positions on the pay issues:

  • Aristotle believed (2400 years ago) that no Citizen of Greece, the first western democracy, should be paid more than seven (7) times that of the lowest earner.
  • The military organizes its service members in two classifications (officer and enlisted ranks), and has a well-structured pay scale (grade, steps in grade etc.) for everyone from privates to general officers and admirals.  Eight pay grades seem to cover one of the largest public institutions in America – the armed services.
  • For many years, especially in regulated industries such as airlines, telephone companies and electric utilities, the military model could often be found. The ratio of pay, say at American Airlines in the regulatory format was $60,000 in 2008 dollars for the lower rank of manager and $600,000 for CEO (10-1) – how quaint!  And consider the disastrous state of airline pay ratios today, as service crumbles and CEO pay soars like the silver-winged jet aircraft!
  • Two decades ago the executive pay system (above) began to change dramatically, and the ratio of highest-to-lowest paid moved from 10-1, or 30-to-1, or 50-to-1 to 300-to-1 or more today.  (Some CEO’s make 1,000-to-one, comparing their pay package to the lowest salaried worker.) 
  • The total pay packages of the top ranked corporate officers are so complex that even board of directors – granting the goodies – cannot understand them.  (Is this good for shareowners, who are represented by the board of directors?)
  • Beginning in January 2007, companies had to report in depth on the total pay packages of the top five (5) highest ranked decision-makers in the corporation.  This is the “CD&A” – the SEC-mandated Compensation Disclosure & Analysis.  For the first time in theory everything is on the table now for inspection, including summaries in easy-to-understand charts.  The second year’s CD&A’s will be reaching shareowners soon.  The SEC’s analysis of the quality of the first year’s disclosure was not a happy time for many of the companies issuing their first CD&A.  Will improvements be made in the Year Two disclosures (covering compensation in 2007)?  Stay Tuned!
  • Finally, many proxy contests soon to become more visible – as shareowners exercise their rights to put non-ordinary business on the shareowner-wide voting ballot – many resolutions will refer directly to or indirectly involve senior executive compensation. 

Enough highlights and commentary – we invite you to follow the often-heated discussions and public debate on executive compensation here in the pages of Accountability Central.

The Editors

 

“…People will be accountable and responsible…”

President Barack Obama – on CEO Comp – February 4, 2009

 

 


Latest on Executive Compensation

May 17, 2019 From Bob Iger to Warren Buffett and Jack Dorsey: These are the highest and lowest paid CEOs of 2018

Source: CNBC

Becoming a chief executive officer of a top company seems like the pinnacle of success, so what kind of money do those at the top make? For its annual report on compensation for CEOs of S&P 500 companies, The Wall Street Journal...

May 7, 2019 Why Bob Iger Deserves His $66 Million Pay Package

Source: Fortune

Ahead of the Walt Disney Company’s expected quarterly earnings report next week, Abigail Disney, the granddaughter of company co-founder Roy Disney, wrote a Washington Post piece titled: “It’s time to call out Disney—and anyone...

May 1, 2019 After CEO got $42.4 million in 2017, Oreo-maker vows to link executive pay to business performance

Source: Chicago Tribune

Nearly a year after Mondelez International shareholders took the unusual step of rejecting the snack giant’s executive pay packages in an advisory vote, the maker of Oreo and Cadbury says it has implemented changes to more...

April 25, 2019 Abigail Disney's Criticism Of CEO Bob Iger's Pay Raises Difficult Questions

Source: Forbes

It seems that every day the internet is consumed with a social cause that creates an uproar. Over the last couple of days, Twitter and other social media sites were lit up by a tweet and subsequent op-ed written by Abigal Disney,...

April 24, 2019 Barclays shareholders urged to vote against executive pay over 'inadequate' response to whistleblowing scandal

Source: CityAM

Shareholder advisory group ISS criticised the measures taken by the bank following Staley’s attempts to unmask a whistleblower in 2016 and advised shareholders to vote down the remuneration report at the bank’s AGM on 2 May.

April 17, 2019 Goldman Sachs Cuts Employee Pay By 20% To Avoid Profit Loss

Source: IB Times

The world’s largest investment bank reduced employee compensation and benefits by 20 percent to $3.26 billion, outstripping the decline in companywide revenue. The reduction in pay and benefits comes to $90,780 for each of the...

April 12, 2019 'It doesn't look good': Lawmakers grill bank CEOs on lavish pay

Source: Yahoo Finance

Among the large banks, Citigroup has the highest CEO pay ratio when measuring the top executive’s pay to the median employee’s salary. JPMorgan Chase comes in second place with a pay ratio of 381:1. Bank of New York Mellon and...

April 11, 2019 Here’s what Jamie Dimon and other bank CEOs said are the biggest risks to the economy right now

Source: CNBC

The leaders of the biggest U.S. banks have a message for Congress: take a closer look at the ballooning markets for student and corporate loans.

March 29, 2019 Investors should vote against top HSBC executives' pay- PIRC

Source: Reuters

Pensions & Investment Research Consultants (PIRC), which advises pension funds and others on how to vote at companies’ annual general meetings, said HSBC Chief Executive John Flint’s potential bonus amount was...

March 5, 2019 Google pay equity analysis leads to raises for thousands of men

Source: Ars Technica

Google has given raises to thousands of men after an analysis of Google's pay structure found that the company would otherwise be underpaying those men relative to their peers, The New York Times reports. The analysis also led to...

Displaying results 1 to 10 out of 318
<< First < Previous 1-10 11-20 21-30 31-40 41-50 51-60 61-70 Next > Last >>
HOME | ABOUT THE SITE | REGISTRATION INFORMATION | VOICES: FEATURED COMMENTATORS AND BLOGGERS  | SPECIAL SECTIONS

Published by

TM

Published by Governance & Accountability Institute, Inc.
Design & Contents Copyright © 2005 - 2019
By G&A Institute unless otherwise noted. All rights reserved.
Accountability-Central is a service mark of G&A Institute, Inc.
New York, New York, USA

Email info@ga-institute.com | Web www.ga-institute.com