Corporate Governance Research Reports. A new report from The Corporate Library found that the value of CEO perquisites at S&P 500 firms declined by a median of 18% in 2009. Most notable was a clear drop in the number of CEOs who received tax gross-ups. The report titled, “The Corporate Library’s 2010 CEO Pay Survey,” […]
Tag Archives | pay
Income Inequality & Distress
In Expenditure Cascades, based on census data for the 100 most populous counties in the United States, Adam Seth Levine, Oege Dijk and Robert Frank found that counties where income inequality grew fastest also showed the biggest increases in symptoms of financial distress, such as commute times, divorce rates and bankruptcy filings. There is no […]
CorpGov WayBack Machine
Ten years ago at CorpGov.net: The CalPERS board voted to invest $125 million in CIM California Urban Real Estate Fund, despite objections from investment staff who recommended only $50 million because of the firm’s (more…)
Banking Pay
Sanjai Bhagat and Brian J. Bolton study the executive compensation structure in the largest 14 U.S. financial institutions during 2000-2008 for their paper, Investment Bankers’ Culture of Ownership? Their results are mostly consistent with and supportive of the findings of Bebchuk, Cohen and Spamann (2010), that is, managerial incentives matter – incentives generated by executive […]
Pay Ratio Nightmare Fitting Concern for Labor Day
US companies face a “logistical nightmare” from a new rule forcing them to disclose the ratio between their chief executive’s pay package and that of the typical employee, lawyers have warned. Yes, the disclosure required by section 953(b) of Dodd-Frank “will provide ammunition for activists seeking to target perceived examples of excessive pay and perks.” […]
Corporate Board Member
Several interesting articles in the current issue of Corporate Board Member. Nice to see coverage there of the Proxy Disclosure blog by Mark Borges, part of the CompensationStandards.com group. Borges spend four years as special counsel at the SEC’s office of rulemaking before joining the Mercer consulting firm. Regarding the new pay disclosure rules, In […]
Enter CorpGov.net's WayBack Machine
In July 2000 we reported reaction to Delaware’s new law which allows corporations to hold shareholder meetings solely in cyberspace. Karen Hampton of Ford said webcasting of meetings will increase. Charles Elson, of the Center for Corporate Governance at the University of Delaware, indicated he likes to “see people eye-to-eye. Yet the world is changing.” […]
Top Pay Issues
Pearl Meyer & Partners presents their annual look at the Top 10 executive pay and governance issues in 2010: Revisit Your Executive Compensation Strategy and Philosophy Address Possible “Red Flag” Compensation Practices Validate and, Where Needed, Strengthen Pay-for-Performance Relationships Expand Assessment of Compensation-Related Risk Review Long-Term Incentive Program Design Adopt an Enforceable Clawback Policy Reconsider […]
CEO Pay in the Context of Society
An alternative approach is offered by Jay Lorsch and Rakesh Khurana in The Pay Problem, Harvard Magazine, May-June/2010, which theorizes find that the current compensation trouble stems from unexamined assumptions about the purpose of boards, executives, and the corporation. The underlying assumption that executives would work more effectively if their monetary rewards were tied to […]
Medium CEO Pay Declines
Median total annual compensation for North American CEOs declined for the second straight year, according to a preliminary CEO pay survey from The Corporate Library. The study analyzed CEO compensation data for fiscal 2009 drawn from 823 proxy statements filed in the United States between July 1, 2009, and March 25, 2010. The report titled […]
Goodyear Vote and the Timeliness of Analysis
The Corporate Library Blog today carries a great post, Inflated CEO pay at Goodyear Tire. Good puns and even better information on CEO Robert J. Keegan’s “maximum payout for a net loss.” Mr. Keegan received four separate stock option grants. The largest of the four market-priced grants, almost 500,000 of them, was at $4.81. Less […]
CEO Pay & Risk Reduction
In Reining in Excessive Risk Taking by Executives: Experimental Evidence, researchers Mathieu Lefebvre and Ferdinand Vieider find that excessive risks are likely to be reduced by aligning executives’ interests with those of shareowners. (paper available at SSRN, March 2010) Abstract follows: Compensation of executives by means of equity has long been seen as a means […]
Church Investors to Vote as a Bloc in UK
PIRC Alerts reports that the UK Church Investors Group (CIG) issued a report on executive pay saying that a ratio between the pay of the top executive and that of the average pay of the lowest 10% of employees in excess of 75 times would be hard to justify. They’ve adopted a common framework. PIRC […]
Directors & Boards
The current edition features a cover article, The Great Divide: Separating the Chairman and CEO Roles. Thought leaders tackle the issues involved in splitting the two top leadership positions of the corporation. On one side of the debate: “The development is inexorable,” says Ira Millstein. “Beware the simplicity of saying two heads are better than […]
SVNACD: New Proxy Rules on Executive Compensation
What are the new SEC disclosure rules for executive compensation, especially the “risk” to the corporation of their compensation plans? How are companies dealing with these new rules — what do the early returns from this proxy season indicate? Are these new SEC requirements more of an annual risk assessment of compensation than disclosure rules […]
ICGN Issues Global Guidelines for Setting Non-executive Director Pay
In new calls for strengthened accountability, transparency and alignment in non-executive director pay, the International Corporate Governance Network (ICGN) is specifically calling for pay to consist solely of a combination of a cash retainer and equity based remuneration. The ICGN also calls for the elimination of perquisites for non-executive directors. Commenting on the new Guidelines […]
Fix the Boards – Fix the System
Gillespie and Zweig hit all the bases for a solid home run. They tell us how the game is fixed and how the rules can be changed to play fair. After all, shareowners own the "ball" and all the other equipment. Will we listen? Even more importantly, will we act?
CEO Greed Doesn't Work for Shareowners
“Firms that pay their CEOs in the top ten percent of pay earn negative abnormal returns over the next five years of approximately -13%. The effect is stronger for CEOs who receive higher incentive pay relative to their peers. Our results are consistent with high-pay induced CEO overconfidence and investor overreaction towards firms with high […]
Yale Governance Forum June 2009: Restoring Trust
Prior to the Forum, I attended a reception honoring the Rising Stars of Corporate Governance for 2009. Those included in the photo are (left to right, top to bottom): Evelynne Change, Coordinator for Corporate Governance, African Peer Review Mechanism (APRM) Secretariat, New Partnership for Africa’s Development (NEPAD) George Anderson, Partner, Tapestry Networks Elizabeth Ising, Associate […]
Mutual Fund Voting
Rank Fund Family Score 1 (tie) Templeton 7 1 (tie) Oppenheimer 7 3 (tie) T. Rowe Price 7.67 3 (tie) AIM 7.67 5 (tie) Schwab 8 5 (tie) JP Morgan 8 7 Janus 9 8 American Century 10.67 9 Legg Mason 11 10 Federated 11.33 11 Franklin 11.67 12 Morgan Stanley 13 13 Van Kampen […]
February 2009 Special News Supplement: Corporate Governance Roundup 2009
Yippee-i-o-ki-ay! From the conference flyer, I half expected Will Pryor, Director of the IAFF Local 1014 and conference “go-to” guy, to show up in chaps, especially with his e-mail encouraging attendees to dress casually. Well, maybe next year. Suits and jackets prevailed in the fashion arena but there was little in the way of pretense […]
The False Promise of Pay for Performance
Many, including this reviewer, called Bebchuk and Fried’s Pay without Performance: The Unfulfilled Promise of Executive Compensation the best corporate governance book of 2004. James McConvill’s The False Promise of Pay for Performance: Embracing a Postive Model of the Company Executive, largely a critique of Pay Without Performance, deserves similar attention. Bebchuk and Fried clearly […]
Best Book of 2004
Pay Without Performance Pay Without Performance: The Unfulfilled Promise of Executive Compensation was the best book published in 2004 in the field of corporate governance. Lucian Bebchuk and Jesse Fried focus on one aspect of corporate governance, executive pay, and clearly demonstrate that many features of executive pay are better explained as a result of […]
Pay Without Performance
Pay without Performance: The Unfulfilled Promise of Executive Compensation was the best book published in 2004 in the field of corporate governance. Lucian Bebchuk and Jesse Fried focus on one aspect of corporate governance, executive pay, and clearly demonstrate that many features of executive pay are better explained as a result of shear managerial power, […]