More Transparency, More Pay for C.E.O.s

“It’s very seldom that publishing compensation accomplishes much for the shareholders. No C.E.O. looks at a proxy statement and comes away saying, ‘I should be paid less.’ ”

Warren Buffett made that contrarian argument earlier this year, at the annual meeting of Berkshire Hathaway, about the steady push for companies to disclose compensation in increasingly specific detail in the name of transparency.

It was an intriguing, counterintuitive point, but largely anecdotal.

Now, a study by three professors at the University of Cambridgemay help prove Mr. Buffett’s assertion.

The study shows in devastating detail how compensation consultants — which use the increasingly available public data on compensation to advise boards on how much to pay chief executives — are helping to ratchet up the pay for the nation’s top executives.

By ANDREW ROSS SORKIN, 

NOVEMBER 10, 2014, New york times

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The Best-Performing CEOs in the World

The knock on most business leaders is that they don’t take the long view—that they’re fixated on achieving short-term goals to lift their pay. So which global CEOs actually delivered solid results over the long run? Our 2014 list of top performers provides an objective answer.- Adi Ignatius, Harvard Business Review

See the list here.

Berkshire's Buffett: Coke pay plan makes 'great sense'- CNBC

Warren Buffett, the billionaire chairman and chief executive officer of conglomerate Berkshire Hathaway Inc , praised Coca-Cola's altered executive compensation plan on Thursday.
"I think the new plan makes great, great sense," Buffett told cable business channel CNBC, referring to Coca-Cola's new guidelines to limit the executive compensation plan, starting next year.
"I think it’s remarkable what Coke did," said Buffett, whose Berkshire Hathaway is the company's biggest shareholder with a 9.1 percent stake. Referring to Maria Elena Lagomasino, chair of Coca-Cola’s compensation committee, Buffett said, "I tip my hat to her."
Buffett said he felt as good as ever about his investment in Coca-Cola. He told CNBC earlier this year he had abstained from a shareholder vote on its controversial equity compensation plan when it came up for renewal in April, even though he considered it excessive. -(Reporting by Sam Forgione in New York; Editing by Jeffrey Benkoe) Thursday, October 02, 2014

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eBay and PayPal CEOs to Be Well Compensated Post-Breakup

Executives who will take over as CEOs after eBay breaks up into two publicly-traded companies next year will be well compensated, according to filings with the SEC. eBay announced the breakup on Tuesday and said current eBay Inc. CEO John Donahoe would step down after overseeing the split.
Dan Schulman was named President of PayPal on Tuesday. Filings show he earns an annual base salary of $900,000 with a target bonus of 175% of his base salary. After the spin-off, his salary will increase to $1 million with a target bonus of 200% of his new base salary. - By Ina Steiner EcommerceBytes.com


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O-Care executive compensation provision raked in millions

An executive compensation reform provision in ObamaCare has generated millions of dollars in savings since last year, according to a left-leaning think tank.The Institute for Policy Studies released a report Wednesday that found limiting tax deductions for executive pay at health insurance companies resulted in $72 million to U.S. coffers from the top 10 publicly held firms alone.
“This $72 million in savings from limiting pay-related deductions for just 57 executives is the equivalent of the cost of dental insurance for 262,000 Americans or the average annual health insurance plan deductible for 28,000 people,” the authors of the report wrote. “If the Obamacare executive pay tax provision applied to all major U.S. corporations, not just to health insurers, U.S. taxpayers would save $50 billion over the next 10 years — and deliver a major blow against CEO compensation business as usual,” they added. - By Ferdous Al-Faruque - 08/27/14 The Hill

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Florida pension fund says no to executive pay at Bloomin', TECO, Roper

Amid the record number of proxy votes cast by the State Board of Administration of Florida at corporate shareholder meetings this year, three votes stand out.
The SBA, which manages the assets of the Florida Retirement System and other funds, said no on advisory votes on executive pay at three of the biggest public companies in Tampa Bay.
Failure to closely tie pay to performance was the reason behind the no votes at Bloomin’ Brands Inc. (NASDAQ: BLMN) and at Roper Industries Inc. (NYSE: ROP), said Jacob Williams, corporate governance manager. - Margie Manning, Quality and Content Editor- Tampa Bay Business Journal

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Performance Pay Up, Options Down

Though not surprising, the latest research on executive compensation confirms companies are moving away from stock options and toward more performance awards as stockholders, shareholders, boards and the public cast ever-skeptical eyes on pay for pay's sake, not tied to actionable goals.

 

The latest analysis of compensation and benefits for CEOs at 240 companies in the Standard & Poor's 500 from New York-based Mercer shows use of performance awards continues to climb. Performance shares, used by 41 percent of those companies in 2011, became a majority practice in 2013, used by 51 percent of respondents.

At the same time, the prevalence of stock options continued to fall in 2013, with just 25 percent of S&P 500 CEOs receiving option grants, down 10 percentage points since 2011.

 

"In practice, performance awards are more closely aligned to explicit financial or operational outcomes than stock options," says Ted Jarvis, Mercer's global director of data, research and publications. That said, though, "the performance measures and associated goals must reflect the company's strategic objectives for performance shares to be meaningful incentives." -Kristen B. Frasch, Human Resource Executive Online

 

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