Archive for August 17th, 2009

Picking Big ‘Peers’ to Set Pay

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Published in The Wall Street Journal August 17, 2009 by Cari Tuna

Tootsie Roll Industries Inc. posted $496 million in sales last year. At Kraft Foods Inc., sales totaled $42.2 billion, about 85 times as much. Yet Tootsie Roll considers Kraft a “peer” when deciding how much to pay its top executives.

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Risky Business

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Expert Perspective by Grahall’s OmniMedia Editorial Board

expert perspective telescopeIn his New York Times article published on August 10, 2009 “Effort to Rein in Pay on Wall Street Hits New Hurdle” author Eric Dash says: “… on Wall Street, banks have become so eager to lure and keep top deal makers and traders that they are reviving the practice of offering ironclad, multimillion-dollar payouts — guaranteed, no matter how an employee performs.” 

Not only will these guaranteed bonuses for the already wealthy Wall Streeters surely irk the public but “… Britain’s banking watchdog, the Financial Services Authority, [warns] that the widespread use of guarantees ‘may be inconsistent with effective risk management’.”

With all the world focused on how compensation can impact the risk dynamic, we thought we would weigh in on the subject of guaranteed bonuses and their apparent risks. 


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US Pay Czar Says He Can ‘Claw Back’ Exec Pay

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Published in CNBC.Com Monday, 17 August 2009 by Reuters

Kenneth Feinberg, the Obama administration’s pay czar, said on Sunday he has broad and “binding” authority over executive compensation, including the ability to “claw back” money already paid, and he is weighing how and whether to use that power.

Link to full article.

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Commodity Traders’ $1 Million Bonus as Oil Doubles

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Published in Bloomberg August 17, 2009 by Chanyaporn Chanjaroen and Lars Paulsson

Wall Street firms are again recruiting commodities traders with promises of $1 million bonuses as prices of raw materials from oil to copper double.

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They Work Hard for the Money

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Expert Perspective by Grahall’s OmniMedia Editorial Board

expert perspective telescopeIn an August 7, 2009 Cnet News article titled “Google ups director compensation awards” author Tom Krazit says: “in a filing with the SEC Friday, Google revealed that it will be breaking with tradition by deciding to pay directors not employed by the company $75,000 a year in cash and $350,000 a year in restricted stock grants.”

From its infancy in 1998 through its rise to the top of the Internet search engine food chain, the company has changed drastically; Google’s business strategy has evolved as its meteoric stock price growth has slowed.  Both these changes should have – and apparently did – engender a change to the Board compensation.
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Filed under: Expert Perspective