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Governance Insight Alert: UnitedHealth Group and 19 additional companies

As health plan premiums continue to climb, so does compensation for top executives at the largest U.S. health insurance companies. According to data from annual filings, the median actual compensation for CEOs at the top 25 health insurance companies climbed about 8 percent in 2013 to $8 million. Actual compensation is a reflection of what […]

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Governance Insight Alert: Alexandria Real Estate Equities and 19 additional companies

REIT Alexandria Real Estate Equities (ARE) holds the unwanted distinction of having receiving the lowest say-on-pay support received by any U.S. company – at its 2013 annual meeting, a mere 9 percent of shares were voted in favor of its pay program. Shareholder dissent was driven by the combination of lackluster stock performance with very […]

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Governance Insight Alert: Alliance Data Systems and 20 other companies

On February 20, Alliance Data Systems Corporation (NYSE: ADS) disclosed new long-term equity incentive awards for its executives, including about $5.2 million granted to CEO Edward Heffernan. The award by itself is not notable, since the vast majority of incentive awards are granted during the first fiscal quarter. However, few companies choose to disclose these […]

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Governance Insight Alert: Apple and 20 other companies

The withdrawal of Carl Icahn’s shareholder proposal for an accelerated buyback program at Apple has placed shareholder activism in the spotlight this week. Icahn, who had recently increased his Apple stake by $500 million to over $4 billion, withdrew his proposal following Apple’s disclosure of “opportunistic” and “aggressive” share repurchases to the tune of $14 […]

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Governance Insight Alert: OMC and 19 other companies

On January 21, 2014, Omnicom Group Inc. (OMC) filed suit in the U.S. District Court to exclude a confidential-voting shareholder proposal from its 2014 proxy ballot. The target of the suit: John Chevedden, an active filer of governance-related shareholder resolutions for well over a decade. This is the third lawsuit filed by an issuer against […]

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Governance Insight Alert: YHOO, STAN and 19 other companies

Eyes certainly popped as they counted the digits of Henrique de Castro’s walkaway benefits following his dismissal from Yahoo (YHOO) last week. De Castro had been lured from Google to serve as YHOO’s COO just 14 months before, with an inducement award then valued at $40 million. He walks away with about $3 million in […]

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Say on Pay “No” Votes Correlate with Securities Class Actions

By Agnes Grunfeld, CFA, Managing Director Since 2011, all US public companies have been required to submit their compensation plans to a periodic advisory vote by shareholders, which is commonly referred to as “Say on Pay.”  A number of our clients have asked us whether “no” votes on Say on Pay seem to bear any relationship […]

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Novartis: Vasella Golden Handshake No Surprise

By John Vizikas, Senior Research Analyst On Friday, Daniel Vasella’s chairmanship at Swiss drug maker Novartis ended with the conclusion of the company’s annual general meeting. Vasella’s tenure ended amid a rash of shareholder criticism regarding the now infamous “Vasella Golden Handshake,” which came to light only a week before the AGM. Under the now-cancelled […]

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Qualcomm’s Misdirected Target

By Scott Patterson, Compensation Analyst Manager  In its most recently released proxy statement, Qualcomm Incorporated made it quite obvious to shareholders that the company rewards its executives at the expense of its shareholders.  The company clearly states in the Compensation Discussion and Analysis that its Performance Share Units (PSU) could payout at target despite the shares […]

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Media Comment On JPMorgan’s Whale Report

By Sonja Ryst, Research Analyst JPMorgan Chase (JPM) released a 132-page report on Jan. 16 that detailed the “London Whale” story surrounding a $2 billion investment fiasco. On the same day the New York financial services firm said its board approved compensating CEO Jamie Dimon $11.5 million for his work in 2012, or around half as much […]

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Realized pay realizable pay grant date value pay and now… performance-adjusted compensation

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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Xstrata Shareholders: Yes to the Merger; No to the Merger Bonuses

By Paul Hodgson – Chief Research Analyst At the special meeting last week, Xstrata shareholders voted to approve the merger with Glencore but voted against controversial retention payments for managers. So contentious were these merger bonuses that the company removed them from the merger vote so that shareholders could separately approve or disapprove them while […]

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Another Golden Hello! from Yahoo!

By Paul Hodgson – Chief Research Analyst Yahoo! CEO Marissa Mayer has poached a Google colleague to be the company’s COO, but not without cost. In a filing yesterday, Henrique de Castro’s golden hello was described. The package is made up of: Base salary and bonus One-time retention equity award (vesting over four years) Make-whole […]

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Xstrata Bending Over Backwards

By Paul Hodgson – Chief Research Analyst The Financial Times first alerted me to an innovative M&A voting process that was introduced on Monday this week by Xstrata to find some way around the current impasse regarding its merger with Glencore. Apart from Glencore raising the price it is going to pay for the company […]

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New Yahoo! CFO has $18 million Reasons to Yodel

By Greg Ruel — Senior Research Associate When Marissa Mayer signed the offer letter to new CFO Kenneth Goldman, she penned it “Start practicing your yodel!” Mr. Goldman is likely to oblige, with an aggregate payday in the offer letter that dwarfs recent compensation at Fortinet Inc., a midcap security software company. Before benefits, the target […]

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Nell Minow Interviews Broc Romanek of The Corporate Counsel

Broc Romanek of the comprehensive, insightful, and influential Corporate Counsel was kind enough to talk to me about his thoughts on “say on pay.”    What have shareholders learned from two years of “Say on Pay?” It obviously will depend on each shareholder but the main lesson is how to manage the enormous logistical nightmare of […]

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GMI Ratings Governance Issue | Abbott Laboratories Inc.

Abbott Laboratories Inc. pleaded guilty and agreed to pay $1.5 billion to resolve allegations that it illegally promoted the drug Depakote. The development highlights the risk of investing in managers who put profit ahead of doing right. The Food and Drug Administration approved Depakote to treat epileptic seizures, bipolar mania and migraines only. In 1999, […]

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GMI Ratings Governance Issue | Chesapeake Energy Corp.

Investors, who thought they could buy Chesapeake shares on the cheap last week, are seeing even better bargain prices today. Reuters reported on Wednesday that Aubrey McClendon secretly ran a $200 million hedge fund that traded in the same commodities that Chesapeake produces. In reaction to the news, Chesapeake

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GMI Ratings Governance Issue | Scientific Games Corp.

Managers get paid nicely. Bargain hunters in Scientific Games Corp. should know that those shares come with high accounting and governance risk. The New York lottery service provider's managers have prioritized their own interests in the past and reported on the company's finances with optimism. Scientific Games's financial statements reflect that it's had a very […]

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Large Pensions Remain for S&P 500 CEOs

By Greg Ruel – Research Associate When Thomas Ryan retired as CEO of CVS Caremark in 2011, he took home a pension of more than $58.5 million. According to CVS’ proxy released Monday, the Supplemental Executive Retirement Plan (SERP) benefits were distributed in a lump sum upon Mr. Ryan’s retirement after 36 years with the […]

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