By Erika Karp, Head of Global Sector Research, UBS Investment Bank In leaving Rio de Janeiro, Brazil, from the largest private sector event ever held in conjunction with an inter-governmental conference, I am struck by both the complexity and simplicity of this week’s UN Conference on Sustainable Development also known as “Rio +20″. As the [...]
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Leaving Rio…. And Going Towards Corporate Sustainability
June 19, 2012 in Daily Viewpoint, Environmental Issues
HSBC’s hold till retirement plan called a badge of ethos
June 13, 2012 in CEO Pay, Daily Viewpoint
By Paul Hodgson – CCO and Senior Research Associate As reported in the Financial Times a few days ago, a group of institutional shareholders including Standard Life are pushing for the spread of a new “hold till retirement” share retention plan that is being contemplated by HSBC. It is said that the lengthy retention clauses [...]
WPP’s CEO Defends His Pay Package
June 12, 2012 in CEO Pay, Daily Viewpoint, Flash Reports
By Paul Hodgson – CCO and Senior Research Associate In a spirited defense of his pay package in the Financial Times, against critics that include investors and proxy advisory firms, Sir Martin Sorrell indicates that compensation policy at the company forces executives to act like owners. I have to admit, at the risk of tarnishing [...]
Yahoo! Performance in Name Only
June 11, 2012 in CEO Pay, Daily Viewpoint, Flash Reports
By Scott Patterson – Compensation Analyst Team Leader The revolving door for CEOs at Yahoo! may have shareholder’s heads spinning and wondering in what direction the company is going. The confusion about who is going to run the company can be matched by the confusion generated by its description of the fiscal year 2011 compensation [...]
Chesapeake Receives a Hammering at Hands of Shareholders
June 8, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
By Paul Hodgson – CCO and Senior Research Associate Preliminary voting results from Chesapeake’s annual meeting today reveal that the two directors up for election must resign, Say on Pay failed spectacularly, even the annual incentive plan failed to receive support. Shareholder proposals, on the other hand, went very well, with proxy access, reincorporating in [...]
Small Print
June 8, 2012 in Daily Viewpoint, News and Opinions, Small Print
By Paul Hodgson – CCO and Senior Research Associate This Week’s Winner of the Name Change of the Month Competition Events Team Leader Mark Magee spotted this name change in a June 5th 8-K that is a clear winner in this month’s competition, and smacks, he notes, of desperation. Quepasa Corporation changed its name to [...]
Chesapeake Energy: the Governance Ravens Come Home to Roost
June 6, 2012 in Corporate Governance, Daily Viewpoint
By Paul Hodgson – CCO and Senior Research Associate [This blog first appeared on Forbes.com] The following is an excerpt from our forthcoming report, Ratings Foresights, which summarizes a few of the companies where GMI Ratings made predictions that governance, accounting, environmental and/or social failures would lead to significant value destruction. Indeed, in November 2007, [...]
Golden Handcuffs Face Shareholder Opposition at Xstrata
June 5, 2012 in CEO Pay, Daily Viewpoint
By Paul Hodgson – CCO and Senior Research Associate In a Reuters’ report on Friday, details of shareholder opposition to the Glencore takeover of mining company Xstrata were given. The report mentions two of the firm’s largest shareholders – Standard life and Fidelity – indicating that they would vote against the merger not simply because [...]
Pay Capped at these French Companies?
June 5, 2012 in CEO Pay, Daily Viewpoint
By Paul Hodgson – CCO and Senior Research Associate Last week I blogged on the plans of the new French Socialist administration to cap the pay of CEOs at 20 times that of the lowest paid worker at those companies in which the state owned a majority stake, as well as trying to impose the [...]
Small Print
June 1, 2012 in Daily Viewpoint, Small Print
By Paul Hodgson – CCO and Senior Research Associate COLA Grande Events Analyst Dovid Muyderman spotted this “cost of living adjustment” in a May 29th 8-K filed by East West Bancorp. Why is it only CEOs and other executives who get COLAs of 233 percent? On May 22, 2012, East West Bancorp, Inc. (the “Company”) [...]
French Government to Impose Pay Cap on CEOs
May 31, 2012 in CEO Pay, Daily Viewpoint, News and Opinions
By Paul Hodgson – CCO and Senior Research Associate The new socialist government in France – leading the way by taking a 30 percent pay cut itself – promised to impose pay limits on executives at companies in which it owns a majority stake, according to the Financial Times today. Pay will be capped at 20 [...]
Facebook: We Told You It Wasn’t Going to Turn Out Well
May 31, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
By Paul Hodgson – CCO and Senior Research Associate GMI Ratings doesn’t rate IPOs. The information contained in their S1s, the document filed with the SEC describing the public offering, is either incomplete for our purposes or subject to change, or both. That’s not to say that we don’t write about IPOs. We’ve written about [...]
Will Wal-Mart listen to its public shareholders?
May 30, 2012 in Corporate Governance, Daily Viewpoint, News and Opinions
By Paul Hodgson – CCO and Senior Research Officer Several high-powered institutional shareholders, such as CalSTRS, have indicated that they are going to vote against a number of Wal-Mart directors who, frankly, should have known better. While institutions such as CalSTRS do not often go public with their voting intentions, when they do, you know [...]
UK Boards: How Good Are We?
May 30, 2012 in Boards, Daily Viewpoint
By Paul Hodgson – CCO and Senior Research Associate Law Debenture has just published a review of the first year of “compulsory” board evaluations. The 2010 UK Corporate Governance Code requires companies in the FTSE 350 to comply with, or explain why are they are not complying, a regulation that calls for a triennial board [...]
Was Sanjay Jha’s Pay a Good Return on Investment?
May 30, 2012 in CEO Pay, Daily Viewpoint, News and Opinions
By Paul Hodgson – CCO and Senior Research Associate [This post first appeared on Forbes.com] The news that Sanjay Jha is stepping down after successfully negotiating the sale of his company Motorola Mobility Holdings to Google confirms the fact – once again – that compensation committees do not understand the terms “long-term” and “incentive”. Included [...]
Small Print
May 25, 2012 in Daily Viewpoint, Small Print
By Paul Hodgson – CCO and Senior Research Associate Small Victories… Company Analyst Kyle Whisler, who found this surprising announcement in Air Lease’s 2012 proxy statement, asked: “Might the work we’re doing have contributed to what is perceived as a ‘governance best practice’?” It sure does Kyle. Mos Def. Air Lease Corporation recently recommended shareholders to [...]
A Solution for ExxonMobil’s Say on Pay Woes
May 22, 2012 in CEO Pay, Daily Viewpoint, News and Opinions
By Paul Hodgson – CCO and Senior Research Associate Last year, almost a third of shareholders voted against ExxonMobil’s Say on Pay resolution. This is well below average levels of support for Say on Pay, even among other oil companies some of whom actually paid their CEOs more than ExxonMobil despite being much smaller, and, [...]
“We told you so, didn’t we?”
May 21, 2012 in Daily Viewpoint, Disclosure, News and Opinions
Normally we’re saying this about the latest collapsed company, that we have typically been rating poorly for at least the last 24 months. This time, however, it’s about SEC disclosure regulations. In this letter that I wrote on 27 March 2006, I indicated that companies should be disclosing realized compensation, not estimated future values for [...]
How “Independent” Would You Act?
May 18, 2012 in Boards
By Michelle Lamb – Research Associate According to the April 6th proxy at Northrop Grumman, it seems their new “Lead Independent Director” Lewis Coleman was paid nearly $5.3 million for security measures in 2011 – this includes a “more secure residence”, security protection, $1.5 million for private jet use, and even the associated personal income tax [...]
Small Print
May 18, 2012 in Daily Viewpoint, Small Print
By Paul Hodgson – CCO and Senior Research Associate Dimon in the Rough From Events Team Leader Mark Magee: a selection of quotations from “that conference call” with JPMorgan’s CEO Jamie Dimon regarding that $2 billion loss, and counting. “We’re willing to bear volatility, and um, that’s life.” “Just because we’re stupid doesn’t mean everybody [...]