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Executive Compensation, Trends, Executive Compensation Survey, Plans![]() Executive Compensation IntroductionUpdated January 2011 The issues surrounding executive compensation – and especially CEO pay -- have been the topics of much discussion in Board Rooms, at Annual Shareholder Meetings and in the media, After a decade of intense debate, efforts to control executive compensation ((under Federal Law) took center stage when the U.S. Department of the Treasury issued interim final rules for reporting and recordkeeping requirements under the executive compensation standards of the Troubled Asset Relief Program (TARP) in January 2009. For the first time, the Federal government was taking a role in setting the compensation at private corporations. The actions resulted in an appointment of an Executive Compensation Czar within the Treasury Department to review compensation packages for companies receiving Federal assistance. The effort did not stop here; further regulations are to follow with the enactment of the Dodd -Frank Financial Reform Legislation adopted in the Spring of 2010. This comprehensive package of “reforms” is now the focus of new regulations (that have to be developed implementing rules of the road). Unless the 112th Congress repeals parts of the law dealing with exec comp, the Federal government will have some kind of role in the issue. This has been welcomed by activist investors concerned about executive compensation policies and practices, especially at under-performing companies with outsized exec compensation. In the worst cases, the focus of executive compensation packages has been upon corporate boards that are accused of being unrealistic, indifferent and in collusion with CEOs. What became the worst criticism was the revelation that too many agreements did not tie compensation with company performance. “Say-on-Pay” became the rallying cry of shareholder groups and social and proxy activists as the hammer and anvil were hot and ready for hammering out reform. The Securities and Exchange Commission enacted rules for publicly-held companies to finally give a voice to shareholders through the proxy process on executive compensation. While the votes are not binding, they do serve to create an atmosphere of greater transparency and accountability of corporate boards to their shareholders. Still the debate over the rules goes on; matters related to CEO compensation will continue to be the focus of this section. Whether you are located in the “C” suite or are a Corporate Secretary, Board Member, Investor Relations professional, shareholder or activist, Hot Topics Executive Compensation should be a daily stop for news, commentary and research. Note: The Editors form no judgment about the level of pay and specific compensation of Chief Executive Officers and others in the “C” Suite. The purpose of this section is to fully air the issues surrounding exec compensation issues at shareholder-owned companies. ----------------- February 2008 How much should a CEO or the top executive officers of a publicly-owned corporation be paid? What is a “fair” compensation? Especially when corporations are laying off thousands of workers and outsourcing work to distant lands? When the middle class is under attack – see CNN Lou Dobbs’ commentary on this? The issue of exec comp has become a burning question with an array of forces on all sides of the issue. When the stock market is doing well and “all boats are rising,” the issue is not as much in focus as when companies (or a single firm) is underperforming and the executive compensation is seemingly out of whack. Out of control. Disproportionate to performance. Unrelated to reality. And other battle cries by investor activists, public officials, journalists, advocate organizations, etc. Consider the case of Home Depot, where the share price fell as the CEO’s pay package rose. Saying goodbye to the CEO, Mr. Nardelli, cost HD more than $200 million. Consider the exiting of the Wonderful Wizards of Wall Street, and their departure comp packages – totaling in the hundreds of millions’ of dollars – as the wreckage they’ve left behind (in the form of sub prime disaster loan portfolios) causes real pain on Wall Street, and on Main Street. We still don’t know the damage they caused with their financial wizardry – but the carnage is felt when home foreclosure rates increase dramatically, as they have over the past year. So – what is a fair price for the Top Man (and a tiny handful of Top Women)? You’ll find news, commentary, research and other useful content here in this Hot Topic subsection of Accountability Central, as well as in various content sections and subsections. (See Corporate Governance, Shareowner Activism, Socially Responsible Investment, and other silos.) Consider this as you formulate your own positions on the pay issues:
Enough highlights and commentary – we invite you to follow the often-heated discussions and public debate on executive compensation here in the pages of Accountability Central. The Editors
“…People will be accountable and responsible…” President Barack Obama – on CEO Comp – February 4, 2009
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Latest on Executive CompensationMay 5, 2022 A record 4.5 million Americans quit their jobs in MarchSource: CNN BusiessThe number of quits increased most significantly in the professional and business services sector, as well as construction. The overall quits rate moved up to 3%, a level not seen since December 2021. April 27, 2022 Citigroup is cutting some jobs this weekSource: efinancial CareersIt's that time of year at Citi. Following a 51% drop in net income at its institutional clients group in the first quarter, we understand that Citi is rolling a few heads. March 22, 2022 How Millennials Are Leaving Their 9-5 For Six-Figure Jobs - text/videoSource: CNBC/YouTubeHave you ever wanted to quit your job, but worried if you’d be able to make ends meet? What if you could actually make more money outside of the traditional 9-5 job? February 22, 2022 Wales reveals plans to become sustainable spacefaring nationSource: Border Counties Advertizer(UK)The Welsh Government has unveiled plans to dramatically grow its space exploration sector and become the first sustainable spacefaring nation in the process. January 27, 2022 Executive pay must be linked to sustainability objectivesSource: EuractivWhat happens to a company director’s remuneration when it does not meet the sustainability objectives that the company has set itself? Nothing. Except for a few pioneering companies that have introduced a simple yet effective... January 27, 2022 The Great Resignation’ is here: 6 in 10 have already written letter for day they quit their jobSource: KSNA survey of 2,000 employed Americans found 59 percent have contemplated quitting their jobs enough to have that letter ready to go but haven’t followed through with sending it – yet. January 10, 2022 Need a raise? Now's the time to demand oneSource: CNNCorporate America has never been better, financially. Meanwhile workers, whose wages have largely been neglected in recent years, now enjoy a historically significant amount of bargaining power. That won't always be the case. August 3, 2021 Goldman Sachs joins Wall Street rivals in boosting junior banker salaries![]() There’s a new minimum wage on Wall Street. Goldman Sachs is giving its junior bankers a pay raise, the last major Wall Street firm to do so in a year where record deal-making activity has led to fierce competition for workers. July 12, 2021 GRI to 'Co-Construct' New EU Sustainability Standards![]() The announcement of a Statement of Cooperation between GRI and the European Financial Reporting Advisory Group (EFRAG) Project task Force sees both organizations agree to share technical expertise to co-construct new EU... June 15, 2021 4 Ways to Attract Top Sustainability Talent SHANNON HOUDE![]() It’s brilliant news that sustainability and ESG professionals look set to become as critical to any business as operations, sales and marketing; but for brands that rely on a steady stream of candidates in these roles, it will... |
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