In his article, “A New Look at Executive Retirement Plans,” Phil Currie of Fulcrum Partners explains why current downtrends may be compelling organizations and compensation committees to revisit a venerable standby in the benefit plan lineup: DC SERPs: the hardest-working component in a retirement plan line up.
Posts Tagged ‘Long Term Incentives’
Expert Perspective by Grahall’s OmniMedia Editorial Board
Rick Newman’s September 23rd article “Outlandish CEO Pay: How to Fix the Problem” published in Seeking Alpha summarizes, simplistically, the problem of excess CEO pay and the possible solutions to this problem, recounting the problems faced by Merrill Lynch, Citigroup and AIG following poor leadership by Stan O’Neal, Charles Prince and Martin Sullivan, respectively. Newman’s point being these Wall Street icons made millions (and millions) while the companies they led lost billions.
Although overly simplified, we don’t disagree with most of what Newman says – in particular, linking pay to long term performance and establishing claw backs as standard protocols in executive contracts. Grahall’s approach to structuring executive compensation packages is to link pay to events. In many companies there is a mismatch between these elements.
Continue reading “Don’t be Fooled” »
An article by V. G. Naraynan published in Harvard Business Review on Monday June 22, titled ‘Executive Pay: It’s About “How,” Not “How Much“’ got our editorial board talking.
The “how” vs “how much” question certainly begins to touch on the core issues at hand. However, these issues are more complex and multifaceted than the article suggests, and unfortunately, as is often the case, the media has little inclination to report the details.
Continue reading “It’s Complicated” »
Published in The Wall Street Journal June 16, 2009 by Lucian Bebchuk and Jesse Fried
Treasury Secretary Timothy Geithner announced on Wednesday the Obama administration’s strong belief in tying executive compensation to long-term company performance. The regulations issued that day direct the new “compensation czar” to ensure that financial firms receiving “exceptional assistance” from the government don’t “reward employees for short-term or temporary increase in value.” Companies not covered by regulations are also currently seeking to tighten the link between pay and long-term performance. The question is how this could best be done.
Published in Financial Week December 7, 2008 by Gregg D. Polsky
A major cause of the current economic crisis was the simple failure of financial institutions to adequately price risk. Former Federal Reserve chairman Alan Greenspan recently testified that he was “in a state of shocked disbelief” that the “self-interest of lending institutions” failed so markedly to protect shareholders. One question is whether a provision of the tax code that encourages companies to use significant amounts of performance-based compensation may have contributed to the current dire situation.
Link to full article