A number of comment letter deadlines have recently passed – or are
approaching – for the various SEC proposals that are currently outstanding
and under con...
1 day ago
Did Banker's pay add to financial crisis?
In a New York Times article Mark Hulbert carefully looks at the evidence for and against the argument that banker's pay added to the financial crisis. There are, however, other aspects that are relevant in the debate about executive compensation. There is also an ethical and moral dimension to the problem of executive pay. As we have stated before, the excesses start at the top. We believe that restraints on the compensation of chief executives would have a beneficial 'trickle down' effect that would moderate compensation further down the corporate hierarchy. In addition, if it is not clear whether top pay contributed to the financial meltdown it should also be difficult to prove the opposite: that high pay for senior executives was beneficial for the economy and the companies concerned. It so any compensation above what can be considered reasonable was a waste of shareholder's money.
Marvel CEO awarded options just before bid
A report states that Marvel Entertainment Inc. Chief Executive Isaac Perlmutter was granted stock options for more than a million shares in the weeks after a subordinate opened discussions with Walt Disney Co. that ultimately led to a merger agreement (Wall St Journal, 24 Sept).
ProGov suggests a simple solution to the problem of excessive executive compensation. As the fish starts to smell at the top the problem really is in essence a problem of excessive chief executive compensation. In order to control executive pay all chief executive compensation should consist only of a basic salary and perks (incentive bonus, share options, pension and medical care) that are granted pro-rata to all employees of a firm. That way any discriminatory pay that favors the man at the top is prevented. The gaming of option, incentive and pension schemes is avoided. No complicated performance targets have to be designed and policed. It is also morally repugnant if chief executives get gold-plated pensions, parachutes etc while the rest of the workforce gets the crumbs that fall off the table. Of course, chief executives may receive base salaries that are (too) high but that will be more easy to monitor and police. Discretionary and discriminatory option awards such as the one awarded to Mr. Perlmutter will be a thing of the past. And Chief executives will have more incentive to moderate compensation further down the ranks. All incentive schemes and pension schemes should be based purely on a pro-rata basis and pay for exceptional performance by individual employees can continue to be freely set by the respective line managers.
ProGov suggests a simple solution to the problem of excessive executive compensation. As the fish starts to smell at the top the problem really is in essence a problem of excessive chief executive compensation. In order to control executive pay all chief executive compensation should consist only of a basic salary and perks (incentive bonus, share options, pension and medical care) that are granted pro-rata to all employees of a firm. That way any discriminatory pay that favors the man at the top is prevented. The gaming of option, incentive and pension schemes is avoided. No complicated performance targets have to be designed and policed. It is also morally repugnant if chief executives get gold-plated pensions, parachutes etc while the rest of the workforce gets the crumbs that fall off the table. Of course, chief executives may receive base salaries that are (too) high but that will be more easy to monitor and police. Discretionary and discriminatory option awards such as the one awarded to Mr. Perlmutter will be a thing of the past. And Chief executives will have more incentive to moderate compensation further down the ranks. All incentive schemes and pension schemes should be based purely on a pro-rata basis and pay for exceptional performance by individual employees can continue to be freely set by the respective line managers.
How can Argentina be allowed into G20?
As far as we know, Argentina still refuses to settle its outstanding debt at full face value. So it is surprising that the country has been invited to participate in the G20 sessions. Need we more proof about the cavalier attitude that today's politicians take to investor rights?
Madness 'Mit Methode'
An expression that may need to be introduced from German into the English language is: 'Der Wahnsinn hat Methode' (Madness with Method). It means an ironic reference to something considered mad that is perpetrated with single mindedness and complete neglect of the fact that the action makes little or no sense at all.
This expression comes to mind when one has a look at the recently released interpretation to the Investment Tax Law released by the German Ministry of Finance. We did not expect a short and succinct paper but our jaw dropped when the paper popped up on our computer screen: a full 147 pages!
Given the thousands of pages of new legislation and edicts that are produced by our Solons every year this may not be a surprise but it highlights in chilling detail how far removed from the real concerns of the citizens the political class has become in the past few decades.
This is just another building bloc on the way to the destruction of private saving and pride of citizenship.
This expression comes to mind when one has a look at the recently released interpretation to the Investment Tax Law released by the German Ministry of Finance. We did not expect a short and succinct paper but our jaw dropped when the paper popped up on our computer screen: a full 147 pages!
Given the thousands of pages of new legislation and edicts that are produced by our Solons every year this may not be a surprise but it highlights in chilling detail how far removed from the real concerns of the citizens the political class has become in the past few decades.
This is just another building bloc on the way to the destruction of private saving and pride of citizenship.
CIT pays $ 85,000 in expenses for CEO's contract extension
CIT Group Inc. extended the employment contract of Chairman and Chief Executive Jeffrey Peek for a year, according to a regulatory filing. CIT said it would pay as much as $85,000 of Mr. Peek's legal and advisory bills related to negotiation of his contract renewal. We think that it is pathetic for an experienced professional to need such expensive advice for a simple contract extension, it is unbelievable that a board agrees to such a waste of corporate (and ultimately shareholder's) funds.