The Financial Times reports today that institutional investors and the SEC are taking interest in the difficult-to-justify pay disparities between the CEO and his immediate subordinates at some public companies. And isolated data points, like Sallie Mae, suggest that the ones with the biggest gulf (in its case, ten times) aren’t delivering commensurate performance. A […]
Read more...This Penn State study, reported at PhysOrg.com, ascertained that narcissistic CEOs gravitate towards bold moves, like big acquisitions or marked changes in strategy, which leads to more variable (although no worse on average) performance. The interesting thing about this finding is the disconnect between Wall Street pressures and boardroom hiring practices. At least according to […]
Read more...In Saturday’s New York Times, Gretchen Morgenson reported that House Committee on Oversight and Reform had issued a subpoena to Towers Perrin, an executive compensation consulting firm, because it had failed to comply with an information request regarding potential conflicts of interest in its pay consulting business. Now because this was a news story, rather […]
Read more...While it’s no news to anyone in M&A land that CEOs have considerable incentives to do deals, it’s nice to see that the wider world is taking notice. The dirty secret is that, at least the way the comp consultants cut the numbers, CEOs of bigger companies get paid more. So when a CEO winds […]
Read more...An article in the New York Review of Books, “The Specter Haunting Your Office,” discusses three books, one by Louis Uchitelle, The Disposable American, meaning the disposable employee; one by Greg LeRoy, on the way corporations play states and muncipalities to extract economic concessions; and one by John Bogle, on “managers’ capitalism” and how it […]
Read more...John Whitehead, former co-chairman of Goldman, who with John Weinberg, presided over the firm when it went from being a commercial paper dealer and institutional equity broker to a top investment bank, decried Wall Street compensation levels in a Bloomberg interview: “I’m appalled at the salaries,” the retired co-chairman of the securities industry’s most profitable […]
Read more...Paul Krugman’s Monday op-ed piece, “Another Economic Disconnect,” attracted the normal amount of attention in the blogsphere (which is to say quite a bit) with less enthusiasm than usual. And I must say I understand why. This piece was a little flat, and managed to miss some key issues. Disclosure: I am a fan of […]
Read more...Oddly, there hasn’t been as much chatter in the blogsphere as I would have expected on the House passage on Friday of what is called the “say on pay” bill. The House legislation would give shareholders a non-binding vote on executive pay and golden parachutes. Initially, the Senate wasn’t expected to take it up, but […]
Read more...This comment came from a reader in response to our post “The Private Sector Isn’t Always Cheaper/Better (Student Loan Edition)” which discussed the fact that the student loan program administered through banks costs $7 more per $100 loan than loans provided directly, and what an incredibly rich fee/expense level that was for a debt product.I […]
Read more...A story in Thursday’s Financial Times, “Global, universal, unmanageable? Why many are wary of bank mega-mergers,” by Peter Thal Larsen describes why most bank mergers fail to live up to their promise. Even though the srticle was prompted by the possible Barclays-ABN Amro merger, its logic applies to much smaller deals. Most advocates of banking […]
Read more...This falls in the “Why didn’t I think of that” category. From Angry Bear: Reader Eightnine2718281828mu5 sent me a couple e-mails. I realized that together they constituted a post. This one is by Eightnine2718281828mu5: ———————————————— I think part of the reason that median salaries don’t rise as fast as CEO salaries is that CEO’s know […]
Read more...A good story by George Anders, “After Rejecting Pay, Some CEOs Find Less Can Be More,” on how CEOs of troubled companies have taken pay cuts, and sometimes forgone salaries entirely. It’s remarkable that this story appeared at all, in that the Journal has to explain to its readership (particularly any top managers and board […]
Read more...Um, because Barney Frank is making their case? This great post from Dean Baker at Beat the Press makes a simple and persuasive argument: Representative Barney Frank has proposed a law that would require corporations to have non-binding polls of their shareholders on CEO compensation packages. According to Marketplace Radio, the opponents of this measure […]
Read more...The blog Conglomerate pointed us to a paper, “The Fetishization of Independence,” by one of its one-time writers, Usha Rodrigues, Assistant Professor of Law at the University of Georgia. They argue it is a “great” paper. I’m not sure I’d go that far, but is well documented and certain to cause a lot of debate. […]
Read more...Berkshire Hathaway’s annual report is out, and with it, Warren Buffet’s famous letter to shareholders. I took a quick look, and found the Financial Times’ take on the main points (“Buffet attacks hedge fund fees“) is as good as anything I could say: Warren Buffett, the world’s second-richest person, on Thursday stepped up his criticism […]
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