Tag Archives | executive pay

CEO Pay Machine Destroying America

The CEO Pay Machine (cover)The CEO Pay Machine: How it Trashes America and How to Stop it (Amazon) by Steven Clifford should be mandatory reading for all compensation committees and those who vote proxies for large funds. The book is easily read and understood by the layperson. It also includes the fact-based evidence needed to convince fiduciaries that voting against most executive pay packages is one of the first steps to restoring shareholder value, company sustainability and the very foundations of American democracy.

Why combine CEO and chair positions or pay executives with options when both practices lead to poor results? We don’t except “everyone else does it” as an excuse for harmful behavior from our teenagers; why should we accept it as a reason from compensation consultants and the former CEOs sitting on most corporate boards? Clifford also outlines possible remedies but nothing will be done unless we shift public opinion. If widely read and discussed, The CEO Pay Machine could be central to change. Continue Reading →

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Tesla Motors Inc: Proxy Score 50

Tesla Motors IncTesla Motors Inc $TSLA, designs, develops, manufactures and sells electric vehicles and energy storage products. Their annual meeting is coming up on May 31, 2016. ProxyDemocracy.org had collected the votes of two fund families when I checked. Vote AGAINST compensation committee; FOR Reduce Supermajority. I voted with the Board’s recommendations 71% of the time. View Proxy Statement via iiWisdom. Continue Reading →

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BlackRock Inc: Proxy Score 59

BlackRock Inc

BlackRock Inc: Before You Vote Your Proxy

BlackRock Inc (NYSE:BLK) provides investment and risk management services to institutional and retail clients across the world. Its product offerings include single- and multi-asset class portfolios investing in equities, fixed income, alternatives and money market instruments..

Their annual meeting is coming up on May 25, 2016. ProxyDemocracy.org had collected the votes of three fund families when I checked. Vote AGAINST pay plan, compensation committee, director with poor attendance; FOR Proxy Access, Report on Proxy Voting and Executive Compensation. I voted with the Board’s recommendations 59% of the time. View Proxy Statement. Continue Reading →

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Corporate Governance: Stepping Back in Time From October 2013

MrPeabodysWayBackMachinePublisher’s Note: Yes, you’ll find many broken links in the material referenced below. After 5, 10 and 15 years, the internet moves on. Many of the organization’s linked have since gone under. We’re just glad to still be here, offering our readers a sense of the history we have shared. More about the WABAC machine.

Five Years Ago in Corporate Governance

  • The Treasury is injecting $125 billion into nine big banks and making a like amount available for other banks that apply. Those financial giants owed their executives more than $40 billion for past years’ pay and pensions as of the end of 2007, a Wall Street Journal analysis shows. (Banks Owe Billions to Executives, 10/31/08) How much of our $250 billion bailout will go to pay for special executive pensions and deferred compensation, including bonuses? Will our disgust with those who brought us the financial melt-down lead to an upsurge in mutual banks and credit unions?
  • Jackie Cook, the founder of Fund Votes, told SocialFunds.com, “Executive compensation is at the heart of a growing problem Continue Reading →
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Stanford Academics Focus on Wrong Problems at ISS

StanfordRockIn a recent Stanford “Closer Look” publication (How ISS Dictates Equity Plan Design), Ian D. Gow (Harvard but graduated from Stanford), David F. Larcker, Allan l. Mccall, and Brian Tayan argue ISS dictates pay equity plans. ‘Nonsense,’ was my first reaction. ISS policies generally reflect the will of its customers. The authors have a point but they miss the main problem. Their arguments begin in familiar territory. Continue Reading →

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Review: The History of Modern US Corporate Governance

CheffinsMODcorpgovThis unique “must have” two volume set traces the development of corporate governance thought around the core issue of the separation of ownership and control while also touching on the board of directors, executive pay, shareholder activism and the regulatory structures that shape corporate governance in the U.S. I include the index to both volumes at the bottom of this review for your reference. The word “modern” in the title refers roughly to the post 1970 world.

Although referenced, the set does not stem directly from The Modern Corporation and Private Property by Adolf Berle and Gardiner Means.  And of course, scholars continue to explore the consequences of this rift in books such as Citizens Continue Reading →

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Corporate Directors Forum – Day 2

This is the last in my series on the Corporate Directors Forum 2013. See materials, slideshowCorporate Directors Forum 2013: Bonus Session, and Corporate Directors Forum 2013 – Day 1, Part 1, and Corporate Directors Forum: Day 1, Part 2. The program was subject to the Chatham House Rule, so there will be little in the way of attribution below but I hope to provide some sense of the discussion. I throw in a lot of opinions. Some are those of panelists, some are mine, and some came from the audience. Continue Reading →

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Another Twinkie Defense

Hostess In the process of complete liquidation, Hostess essentially admits it robbed the pensions of 18,000 unionized workers and put it toward executive pay for winding down the company. According to AlterNet,

Just last month, a judge agreed to let Hostess executives suck another $1.8 million out of the bankrupt company to pay bonuses to CEOs.

Read the expose, Twinkie CEO Admits Company Took Employees Pensions and Put It Toward Executive Pay.

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Video Friday: Roger Martin – Fixing the Game

The common belief that firms exists to maximize shareholder value has led to massive growth in stock-based compensation for executives and a naive and wrongheaded coupling of the “real” market (the business of designing, making and selling products and services) with the “expectations” market (the business of trading stocks, options and complex derivatives). It’s a bit like confusing winning the Super Bowl with winning a bet on the Super Bowl. Continue Reading →

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