Archive for April, 2009

Freddie Mac Pays $680,000 Bonus to Kellermann Estate

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Published in Bloomberg April 30, 2009 by Dawn Kopecki

Freddie Mac, the mortgage-finance company under federal control, paid $680,000 in retention bonuses to the estate of deceased Chief Financial Officer David Kellerman. 

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Is Bank Compensation Really Rising?

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Expert Perspective from Grahall

In an April 26th 2009 article entitled “After Off Year, Wall Street Pay Is Bouncing Back“, reported Louise Story (journalist for The New York Times) writes “Workers at the largest financial institutions are on track to earn as much money this year as they did before the financial crisis began, because of the strong start of the year for bank profit.”  Ms. Story bases her reporting on first quarter compensation expense disclosures for financial services institutions saying: “… compensation expense is the only publicly disclosed figure related to pay at the banks, and it is the best figure for calculating pay per worker.” 

Well, she is correct in this last observation but it is misleading and possibly irresponsible to extrapolate the first quarter of 2009 reported compensation expense out for the entire year and conclude that: “If that pace continues all year, the money set aside for compensation suggests that workers at many banks will see their pay — much of it in bonuses — recover from the lows of last year.”  Nevertheless, do not be surprised if this is exactly what happens.
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Wall Street needs reality check on pay: Grassley

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Published in Reuters April 27, 2009 by Martha Graybow.

Wall Street has shown little interest in getting rid of lucrative employee payouts even after the financial industry needed billions in taxpayer bailouts, a leading U.S. Senate Republican said on Monday.

Charles Grassley, of the Senate Finance Committee, said financial industry leaders — particularly those at companies that have accepted bailout funds — need to be more in touch with the rest of the country when crafting employee compensation.

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Money for Nothing

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Published in The New York Times April 27, 2009 by Paul Krugman

…we should be disturbed by an article in Sunday’s Times reporting that pay at investment banks, after dipping last year, is soaring again — right back up to 2007 levels.

Why is this disturbing? Let me count the ways.

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Link to read the Expert Perspective of Grahall Partners regarding this issue.

Filed under: Newsfeeds



At Annual Meetings, Perks Are Out and Anger Is In

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Published in The New York Times April 26, 2009 by The Associated Press.

As annual meetings ramp up in earnest for the first time since the economic meltdown, the gatherings are very different affairs. Perks and glitz are out. And, at least in the financial sector, shareholder anger is in.

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After Off Year, Wall Street Pay Is Bouncing Back

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Published in The New York Times April 26, 2009 by Louise Story

The rest of the nation may be getting back to basics, but on Wall Street, paychecks still come with a golden promise.

Workers at the largest financial institutions are on track to earn as much money this year as they dd before the financial crisis began, because of strong start of the year for bank profits.

Link to full article.

Link to read the Expert Perspective of Grahall Partners regarding this issue.

Filed under: Newsfeeds



Investors, Take Note: New Bill to Target Boards, ‘Say on Pay’

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Published in The Wall Street Journal April 25, 2009 by Phred Dvorak and Kara Scannell

Sen. Charles Schumer plans to introduce next week a corporate-governance bill that would give investors an advisory vote on executive pay and require companies to name independent chairmen and elect directors annually.

The move is the latest and most comprehensive push to alter governance practices in the wake of Wall Street’s meltdown. Some provisions in the proposed bill respond to criticism that shoddy oversight and warped executive-pay practices allowed banks to engage in risky businesses that later imploded.

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Assessing the ‘Reasonableness’ of Executive Compensation in Closely Held Corporations

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Published in the New York Law Journal on April 23, 2009 by David E. Kahen and Elliot Pisem  

Every tax advisor to closely held corporations is confronted from time to time with the question of whether compensation paid to the chief executive or other senior officer of a closely held corporation will be fully deductible under Internal Revenue Code section 162(a).

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Firms End Key Benefit for Executives

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Published in the Wall Street Journal April 21, 2009 by Cari Tuna

Dozens of U.S. corporate executives are losing a controversial benefit — and gaining bigger tax bills.

As the recession fuels outrage over executive-pay excesses, 43 companies in Standard & Poor’s 500-stock index will stop paying certain taxes for their top brass this year, according to a review of 2009 regulatory filings for The Wall Street Journal by compensation-research firm Equilar Inc.

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Developing a Club Survey

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Expert Perspective by Grahall’s Claudia DeFrancisco

expert perspective telescopeA club survey can be an effective and efficient method for understanding of the compensation trends and issues.

A club survey is a survey in which the participants — the members of the club — sponsor the survey, share in the cost and are responsible for the survey’s design and administration. Club surveys focusing on rewards components and issues can be an effective tool for targeting specific labor markets and unique jobs.

Filed under: Expert Perspective