As part of the introduction to the IPO Pay Reporter™, our improved market-leading IPO compensation data services, we have conducted quite a bit of analysis on trends in executive compensation at companies that have recently gone public. What caught our attention the most was the significant reduction in ownership levels for founder CEOs of IPO companies. Ownership at IPO has been trending down for a number of years, but only in the last few years we’ve seen the fall off become significant.
While some would point to a small sample size, this argument is really only relevant for 2008 when 16 companies had initial public offerings. In reality the continuous drop in ownership has come over several years when an average of 100 companies per year made an initial public offering. Granted, this is nothing like the 1990s, but this is the reality of the first decade of the 21st century. Fewer companies are going out, and those that do have fundamentally changed from what we were used to seeing in the 1990s.
Read more…
Exec Pay, IPO
Exec Pay, IPO
Newsletter: Our Winter 2009 newsletter is out and available for download on our website here. This quarter we’ve dedicated the newsletter primarily to stock option repricings, a topic that has come charging back into the compensation world after a near decade hiatus.
White Papers: We’ve also recently published a white paper, “The Trouble With Options”, that discusses the fundamental disconnect stock options create between executive behavior and shareholder value creation. World@Work subscribers can read an abstract on the World@Work website here. Alternatively, the full paper is available here on our website.
Suggested Reading:
James Surowiecki wrote an interesting article for the New Yorker that discusses, among other things, ’sticky wages’, ‘talent hoarding’, and the productivity of the labor force.
Meanwhile, while the average hourly wage of employees increased by about 3% last year, Merrill Lynch, a company that shed nearly 80% of its shareholder’s value, managed to find a way to pay $209 million to ten of its highest paid employees. You can find details in the Wall Street Journal (subscription) or the New York Times.
And finally, the New York Times has an interactive chart that outlines the gaps that continue to exist between women and men in the same job across a number of occupations.
Exec Pay, Long-Term Incentives
Add new tag, Employee Pay, Exec Pay, Shareholder Issues
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
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 January 5th…
- In response to ten questions posed by a Congressional Oversight Panel, the Treasury Department admitted that they still have no way of determining if companies receiving TARP funds are complying with the executive compensation restrictions (Download the PDF). This is really no surprise given Read more…
Legislation, TARP, What's News
Exec Pay, Layoffs, Paycheck Fairness Act
