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.
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:
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.
“…People will be accountable and responsible…”
President Barack Obama – on CEO Comp – February 4, 2009
Latest on Executive Compensation
Source: Fast Company
A billion dollars of diversity initiatives have barely moved the needle. Could tying goals to executive pay make a difference?
February 10, 2017 Compensation Issues, Financial Reporting, Director and Officer Questionnaires: Preparing for 2017 Proxy SeasonSource: The National Law Review
With 2017 proxy season kicking off, we would like to remind clients and friends of some developments that could impact public company annual reporting for 2017
February 8, 2017 Say on Pay Frequency Revisited for 2017Source: National Law Review
In January 2011, the Securities and Exchange Commission adopted final rules implementing provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to shareholder approval of executive compensation.
February 7, 2017 Pay Ratio Rule That CEOs Hate Is Getting a Fresh Look at the SECSource: Bloomberg
A Dodd-Frank Act requirement that companies disclose how top executives’ compensation compares with pay for rank-and-file employees will get fresh scrutiny at the U.S. Securities and Exchange Commission after the agency’s acting...
February 3, 2017 CEOs Earn Less at More-Prestigious FirmsSource: Harvard Business Review
Research has found that superstar CEOs, those who win awards like “CEO of the year,” can earn an average of about $7.8 million more in annual pay. But what about superstar firms? Can prestigious companies get away with paying...
February 2, 2017 Trump’s Proposed Changes to Tax, Dodd-Frank, DOL Could Impact Executive CompensationSource: Lexology
If enacted, these proposals could have a significant impact on the way businesses handle executive compensation, permitting companies greater flexibility in structuring compensation arrangements. His staff also hinted at a...
January 27, 2017 Papa John's CEO says executive salaries are 'immoral' and give corporate America a bad nameSource: BusinessInsider
As a CEO worth $710 million, Papa John's founder John Schnatter isn't someone you'd expect to hear speaking out against overpaid executives
January 20, 2017 JPMorgan CEO Jamie Dimon gets $28 million pay packageSource: Reuters
JPMorgan Chase & Co (JPM.N) directors paid Chief Executive Jamie Dimon $28 million in total compensation for 2016, a 4 percent bump from the prior year, the company said on Thursday.
January 19, 2017 How To Fix Executive Compensation And CEO Pay In Corporate AmericaSource: Seeking Alpha
Over the past four decades, as executive salaries - adjusted for inflation - have ballooned by nearly 1,000%, the average worker has seen their compensation increase by a relatively meager 11% over the same period.
January 3, 2017 Canada’s top CEOs earned more than ever in 2015Source: The Record
The average total compensation for Canada's 100 best-paid CEOs hit a historic high of $9.5 million in 2015, according to the results of an annual report on executive compensation.
|HOME | ABOUT THE SITE | REGISTRATION INFORMATION | VOICES: FEATURED COMMENTATORS AND BLOGGERS | SPECIAL SECTIONS|