Tech Companies Fly High on Fantasy Accounting

Technology shares have been powering the stock market recently, outperforming the broader stock indexes by wide margins. The tech-heavy Nasdaq 100, for example, is up 19 percent over the last 12 months, almost twice as much as the Standard & Poor’s 500-stock index, which has risen 10 percent.

Investor enthusiasm for all things tech is understandable, given the disruptions the industry is bringing to so many businesses and the potential profits associated with that upheaval.

But there’s a more troubling aspect of the current exuberance for technology stocks: the degree to which so many of the popular companies with premium-priced shares promote financial results and measures that exclude their actual costs of doing business.

By  GRETCHEN MORGENSON, The New York Times

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Valeant VP’s $50.6 Million Pay Second to Apple Among Non-CEOs

Valeant Pharmaceuticals International Inc. paid Executive Vice President Ari Kellen $50.6 million in 2014, giving him the second-highest pay of any newly hired non-chief executive in the U.S.

The package is part of Valeant’s strategy to reward new hires when they walk in the drugmaker’s doors. Kellen’s pay trails only Apple Inc.’s Angela Ahrendts among U.S. executives at publicly traded companies whose 2014 compensation has been reported, according to summary compensation table data compiled by Bloomberg. Ahrendts, who was hired as Apple’s new sales chief after serving as CEO of Burberry Group Plc, received $73.4 million in 2014.

-Bloomberg Business by Caroline Chen and Alicia Ritcey, April 10, 2015

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SEC takes a step toward finishing hotly demanded CEO pay rule

The 2010 Dodd-Frank bank reform law mandated the agency make a rule to require public companies to disclose the ratio of CEO pay to the median paid employee. It took three years to come out with a proposal, and after 22,860 comments, it’s still working on a final rule.

The SEC staff has now published an analysis by the agency’s Division of Economic and Risk Analysis that considers the impact of various methods of calculating the required disclosures. That development comes just two days after Senator Elizabeth Warren, the Massachusetts Democrat, called out the delays in finalizing the rule while harshly criticizing the overall performance of SEC Chairwoman Mary Jo White.

-By Francine McKenna, Published: June 5, 2015

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