What’s News is a regularly updated summary of news stories, typically related to compensation, that we are following, find interesting, or find baffling.
Week of March 16th…
Lost this week among all of the AIG bonus calamity (our thoughts to come on this shortly) were a number of companies seeking shareholder approval for option exchanges:
- Google announced that approximately 93% of its underwater options granted to employees will be exchanged on a one-to-one basis. Employees typically receive fewer number of options when they surrender their underwater options because they are trading in something they view as worthless for something of value, which is why many feel Google’s one-to-one exchange is quite a generous move.
Common arguments that companies use when requesting option-exchange programs from shareholders include:
Read more…
Long-Term Incentives, Shareholder Issues, What's News
New restrictions on executive compensation have been issued by the Treasury Department in an effort
…to strike the correct balance between the need for strict monitoring and accountability on executive pay and the need for financial institutions to fully function and attract the talent pool that will maximize the chances of financial recovery and taxpayers being paid back on their investments.
US Department of Treasury (TG-15) , February 4th, 2009
Essentially, companies that receive assistance through programs that are widely available to most firms and have pre-determined terms and conditions will not be affected. The Treasury Department identified the Capital Purchase Program as one such program in which participating Read more…
Exec Pay, Shareholder Issues
Bailout, Exec Pay, Shareholder Issues
The “Say on Pay” movement may lead to shareholders having a bigger voice on the metrics and mechanisms of executive compensation and their link to company performance. There is wide support among institutional investors and shareholder advocacy groups for non-binding shareholder votes.
Recent happenings …
Presidio Pay’s thoughts …
We continue to advise our clients to provide as much transparency on their executive pay strategy and philosophy through both the proxy filing process and other communication opportunities with shareholders and employees, to the extent that it does not divulge key competitive business strategies.
While we believe the concept of “Say on Pay” has merit, our concern is that this process does not engage the Board, shareholders, and executives in a coordinated discussion on not only compensation but also its impact on overall company performance and strategy.
Exec Pay, Shareholder Issues
Exec Pay, Say On Pay, Shareholder Issues
