By Paul Hodgson, Chief Research Analyst A recent white paper from compensation consultancy Farient Advisors brings a new approach to valuing executive compensation. It premises three main concerns about the existing alternative approaches to putting a number to compensation – realized pay (the GMI Ratings approach which includes vested stock and exercised stock options) and [...]
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Realized pay realizable pay grant date value pay and now… performance-adjusted compensation
December 3, 2012 in CEO Pay, Daily Viewpoint, Executive Pay
It is time for real bank clawbacks
November 15, 2012 in CEO Pay, Daily Viewpoint, Financial Crisis, Scandals
By Paul Hodgson – Chief Research Analyst An edited version of this op-ed appeared on Bloomberg View on October 3, 2012 and this version appeared today on my blog on Forbes.com It was announced in the FT today that the Financial Services Authority expects banks to reduce or clawback bonuses in British banks and non-U.K. [...]
Executive Pay Out of Alignment at Abbott Laboratories
October 18, 2012 in CEO Pay, Daily Viewpoint, Scandals
By Jeffrey Gramlich – L.L. Bean/Lee Surace Professor of Accounting, at the University of Southern Maine This is a summary of a presentation given by Jeffrey Gramlich, L.L. Bean/Lee Surace Professor of Accounting, at the University of Southern Maine, made on behalf of GMI Ratings at the recent Leet Symposium at the Case Western Law School [...]
£7MM Pay-off for News Corp’s Rebekah Brooks
October 16, 2012 in CEO Pay, Daily Viewpoint, Scandals
By Paul Hodgson – Chief Research Analyst Yesterday the Financial Times wrote that the former CEO of News International, Rupert Murdoch’s U.K. newspapers business, Rebekah Brooks received a golden parachute of more than £7 million on her resignation. The paper describes the payments as comprising cash, pension payments, an allowance for legal fees and the [...]
Citigroup loses top two executives, including CEO Pandit
October 16, 2012 in CEO Pay, Daily Viewpoint
By Paul Hodgson – Chief Research Analyst Citigroup announced the resignation of CEO Vikram Pandit this morning. The website release said: Given the progress we have made in the last few years, I have concluded that now is the right time for someone else to take the helm at Citigroup. However, the proximity of the [...]
Deutsche Bank Director in Favor of Pay Caps
September 17, 2012 in CEO Pay, Daily Viewpoint
By Paul Hodgson – Chief Research Analyst With more news on Deutsche executive remuneration, following on from last week’s rejig of pay, the Financial Times reports that Werner Wenning, the former CEO of Bayer, who is on the Deutsche Bank board of directors is a supporter of pay limits. According to the FT, Herr Wenning said in an interview [...]
Correction: Universal Detection Technology and the Billions of Shares
September 14, 2012 in CEO Pay, Daily Viewpoint
By Paul Hodgson – Chief Research Analyst We published, two weeks ago, a story detailing a windfall to the CEO of Universal Detection Technology and other employees and directors which was based on incorrect assumptions and analysis. In putting together the story, in order to determine what happened to the stock price subsequent to the [...]
Another UK CEO Falls Victim to Say on Pay?
September 13, 2012 in CEO Pay, Daily Viewpoint
By Paul Hodgson – Chief Research Analyst Darty plc’s CEO, Thierry Falque-Pierrotin, will leave by “mutual consent” in December 2012. The press release announcing this makes no mention of the fact that the firm is facing a shareholder revolt over a payment to the CEO, originally made in 2009 when he joined Darty, then known as [...]
Deutsche Bank Bonuses Deferred for Five Years
September 12, 2012 in CEO Pay, Daily Viewpoint
By Paul Hodgson – Chief Research Analyst In a statement yesterday from Deutsche Bank’s co-chairmen Jurgen Fitschen and Anshu Jain, it was announced that significant changes were going to be made to the bank’s business model, strategy and compensation practices. Most significantly from a governance standpoint, bonuses at the bank will be reduced and instead [...]
JPMorgan and Citigroup to “rethink” Executive Compensation
September 11, 2012 in CEO Pay, Daily Viewpoint
By Greg Ruel – Senior Research Associate According to the Wall Street Journal, banking giant JPMorgan Chase & Co. (JPM) is considering bonus cuts for senior managers, including CEO Jamie Dimon. Though details are few, JPM’s board is expected to slash executive bonuses in an about face on executive compensation following an estimated $5.8 billion [...]
The Failure of U.S. Capitalism is the Shareholders’ Fault?
August 7, 2012 in CEO Pay, Daily Viewpoint
By Paul Hodgson – Chief Research Analyst There’s been a lot of talk lately about blaming shareholders and the corporate governance movement for the failure of the capitalist economy. This makes about as much sense as claiming that all corporations are inherently evil. But that has not prevented some commentators from tilting at every governance [...]
$360 million for chairman of Manning & Napier
July 31, 2012 in CEO Pay, Daily Viewpoint
By Paul Hodgson – CCO and Senior Research Associate In a late entry in the “you’re joking, surely” series, the chairman of Manning & Napier, William Manning, appears to have earned “income” of more than $360 million during fiscal 2011. The largest part of this comes from 17.75 million Class B units of M&N Group [...]
CEO Gives More Than 20% of Pay to Those Who Got Him There; the Employees
July 23, 2012 in CEO Pay
By Greg Ruel- Senior Research Associate On Friday, Yang Yuanqing, CEO of Chinese multinational technology company Lenovo Group Limited, made a gesture seldom seen in the world of executive pay. He took $3 million of a recent bonus and disbursed it amongst 10,000 lower level workers, including production line workers, assistants, and receptionists at an [...]
Yahoo! Mayer Golden Hello
July 20, 2012 in CEO Pay, Daily Viewpoint, News and Opinions
By Hoang Nguyen – Senior Research Associate On July 16th, 2012, Yahoo! Inc. announced the appointment of Marissa Mayer as President and CEO and member of the board effective July 17th, 2012. Ms. Mayer was one of the first employees at Google, Inc. and most recently was Vice President of Local, Maps, and Location services. [...]
Ralph Lauren Pay Coming Down to Earth?
July 20, 2012 in CEO Pay, Daily Viewpoint
By Scott Patterson – Compensation Analyst Team Leader Ralph Lauren, CEO, Chairman and Founder of Ralph Lauren Corporation, has maintained strong pay levels through the economic slowdown with total realized compensation of more than $30M for each of the past four years thanks in part to his 2008 employment agreement. A new five-year agreement was [...]
Simon Stays: Retaining the already retained at Simon Property
June 28, 2012 in CEO Pay, Daily Viewpoint
By Scott Patterson – Compensation Analyst Manager Thanks to an employment agreement effective July 6, 2011 there is a very good chance David Simon will be celebrating his 25th anniversary as CEO of Simon Property Group in 2019. The new contract has provided Mr. Simon with millions of reasons to stay on with the company [...]
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 [...]
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 [...]