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 [...]
Tag Archives | executive compensation
Novartis: Vasella Golden Handshake No Surprise
February 25, 2013 in Corporate Governance, Daily Viewpoint, Executive Pay
The Wall Street Journal: Mylan Chief Flies Firm’s Jet to Side Gig: Son’s Concerts
December 17, 2012 in GMI In the News
…In 2007 Mylan bought its first Bombardier Global Express and this year replaced it with a new plane. In 2011 the firm said it spent $500,779 to provide personal flights for Mr. Coury, a calculation that included incremental costs, such as fuel and landing fees. His aircraft perks for 2011 ranked ninth among executives of [...]
Weatherford’s CEO Remains In Power
December 13, 2012 in Corporate Governance, Daily Viewpoint
Weatherford International Ltd. (WFT) is shaping up to be a takeover target with accounting issues that wiped out half its market value on the verge of being resolved, Bloomberg reported this week. So far nothing yet has budged the oilfield services company’s CEO Bernard J. Duroc-Danner from power. Mr. Duroc-Danner has managed Weatherford and its [...]
GMI Ratings Governance Update | Moody’s Corp.
November 20, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Moody’s Corp. (MCO) could better safeguard itself from the business conduct failures that the Securities and Exchange Commission discovered in its second annual review of nine ratings agencies. The New York firm needs to take more steps to prevent its senior managers from abusing their powers. Without specifying names, the U.S. regulator said on Nov. [...]
GMI Ratings Governance Update | The McGraw-Hill Companies
November 19, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
The U.S. Securities and Exchange Commission published a review of credit ratings agencies’ business conduct that noted findings such as the failure to follow policies, keep records, and disclose conflicts of interest. While the regulator did not say who failed at what, financial filings show that the people who run The McGraw-Hill Companies (MHP), of [...]
Forbes: It Is Time For Real Bank Clawbacks
November 15, 2012 in GMI In the News
Paul Hodgson, Contributor 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. banks with operations in London as a result of the series of scandals that have wrought the industry during 2012. Such an announcement could not have come at [...]
GMI Ratings Governance Issue | Eastman Kodak Co.
November 14, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
As Eastman Kodak Co.’s (EKDKQ) cash dwindles and its creditors battle in bankruptcy court for repayment, some objected that the photography company’s CEO Antonio M. Perez continues putting his own interests first when it comes to compensation. Kodak said Nov. 12 that it managed to swap $317 million of existing debt and to obtain $476 [...]
GMI Ratings Governance Issue | The Goldman Sachs Group, Inc.
November 7, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
The Goldman Sachs Group, Inc. (GS) announced the appointment of another independent director, Mark Edward Tucker, effective Nov. 5. But Goldman has much further to go on improving its corporate governance. Mr. Tucker isn’t the ideal candidate. As the CEO of AIA Group Ltd., the insurance company that American International Group Inc. (AIG) spun-off in [...]
GMI Ratings Governance Issue | Allstate Corp.
October 31, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
As homeowners grapple with damages in the aftermath of the storm in the Northeastern U.S. this week, The Allstate Corp. has readied its staff to handle the inevitable insurance claims. Unfortunately, those seeking help depend on the promises made by a company that shows signs of poor corporate governance. Allstate said Monday that it had [...]
GMI Ratings Governance Update | TransDigm Group Inc.
October 29, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
TransDigm Group Inc. (TDG) recently announced reforms such as no longer entitling senior executives to company-paid automobile or country club expenses — but clearly, the aircrafts parts supplier has a much longer way to go on improving its corporate governance. The company said October 25 that the previous day it amended its employment agreements with executives ranging from [...]
Obama Executive Compensation Reforms: Chickens Coming Home to Roost
October 26, 2012 in Daily Viewpoint, Executive Pay: Banks
By Paul Hodgson, Chief Research Analyst According to a Reuters report this morning, President Obama has his sights set on executive compensation reform as a further move to prevent risky behavior being incentivized in the financial services sector. In an interview with Rolling Stone magazine, Mr. Obama said: “The single biggest thing that I would [...]
GMI Ratings Governance Update | Best Buy Co., Inc.
October 22, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Best Buy Co., Inc. (BBY)’s new CEO Hubert Joly faces an uphill battle in turning around the consumer electronics retailer. The company’s risk of a blowup due to accounting, governance or financial problems has worsened to dangerous levels. To be sure, the team is fighting for a comeback. For example, they’re preparing to sell a [...]
Business Courier: Ex-CEO suing Omnicare over life insurance policies
October 19, 2012 in GMI In the News
by James Ritchie - Staff Reporter- Business Courier A lawsuit filed by former Omnicare Inc. CEO Joel Gemunder is demanding more money from the company that gave him a package valued at $146 million when he retired abruptly in 2010…. Paul Hodgson, senior research associate with GMI, said Gemunder could be seeking the face value [...]
GMI Ratings Governance Update | Netflix, Inc.
October 11, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Netflix, Inc. stock prices recently surged, only to plunge once again. If the Los Gatos, Calif. video subscription company can’t stage a consistent comeback after months of travail, shareholders will find it challenging to make its senior managers accountable. Netflix shares soared nearly 10.5% to close at $73.52 per share on October 8, but have sunk since to [...]
GMI Ratings Governance Update | Avon Products, Inc.
October 10, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Avon Products, Inc. (AVP)’s embattled former CEO Andrea Jung said she’ll step down as board chairman on December 31. The beauty company has taken several such moves toward restoring its credibility in recent months, and now has stronger corporate governance. While serving as both chairman and CEO, Ms. Jung came under fire for problems ranging [...]
GMI Governance Update | BP p.l.c. and OAO Rosneft
September 26, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
The media is buzzing about the possible sale of a stake in the Russian government-owned oil company OAO Rosneft to BP p.l.c. (BP). The U.K. oil giant might appoint a Russian director to its board, some reported in recent days. If the two companies do integrate, BP goes into the deal with better supervision of its [...]
CFO Journal: Oracle Compensation: Big Numbers, Simple Formula
September 24, 2012 in GMI In the News
Oracle’s fiscal-2012 proxy again drew coverage for its eye-popping executive compensation. CEO Larry Ellison received compensation valued at $96.2 million, and CFO Safra Catz and Co-President Mark Hurd received $51.7 million each. Underlying those large numbers, however, are some very simple and predictable calculations. (registration required)
GMI Ratings Governance Update | Oracle Corp.
September 24, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Oracle Corp. announced a growing profit on lower sales – but who really knows what happened? Numerous warning signs suggest that CEO Larry Ellison and his team could have fudged the California software company’s earnings numbers. Oracle said on September 20 that its sales fell 2% to $8.2 billion during the three months ended August [...]
GMI Ratings Corporate Governance Update | Northrop Grumman Corp.
September 21, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Northrop Grumman Corp.’s financial results now show fewer signs of risky accounting, but the defense firm’s corporate governance is far from perfect. The company’s financial statements reflect an AGR score of 42, indicating higher accounting and governance risk than 58% of companies. That’s up significantly from the previous score of 10 we had discussed in [...]
Key Metrics Series: Internal Pay Equity
September 20, 2012 in Daily Viewpoint, Key Metrics
Companies that pay their CEOs much more than their other named executive officers (NEOs) may be overpaying for their Chief Executive. Alternatively, they may be exposed to key person risk if the CEO’s contributions actually merit much higher compensation than what is awarded the other NEOs. Academic research also suggests that companies where CEOs earn [...]