Public Companies: Is the belt tightening on exec pay? - The Business Review (Albany):

edovogopu.wordpress.com
Instead, the Glenville-based parent of Trustco Bank more than double d the salaries of CEO Robert McCormick and otherftop officers. McCormick, who had a salary of $400,000 in 2008, now will earn a base of In a proxy statement filed withthe , TrustCko said bonuses had been based on return on An ROE of under 13 percentt meant no payouts. The bank now has decidefd that this wastoo restrictive, givenj the pressure on banks to shore up their It therefore eliminated the bonus plan.
“Thisd decision reflected the [board’s] view that it was appropriatw in this time of economic uncertaintyt forthe executives’ cash compensatiobn to be less dependent on the achievement of performancer standards,” TrustCo’s proxy states. Bank officials declinesd further comment. Economic turbulence, along with shifting popular andpoliticalk sentiment, have public companies all over the country rethinkinv their compensation policies. Bonuses have been at the cented ofthe storm, especially after the public outrage that followed the payment of $165 million to executives at after the insurance giant was bailef out by taxpayers.
But all forms of compensationn are getting acloser “It’s obviously a very hot topic—oned might even say contentious,” said Paul DeNicola, associate director of the Governancse Center of The Conference Board, a nonprofit economic researcgh organization in New York “The sentiment has been brewing, but the statre of the economy exacerbatedx it.” There are four main components of executivre pay: salaries, benefits, bonuses and stockj options. For many performance-based pay makes up more than two-thirds of total The question at the heart of the debate is, did the performance—at a time of sinking corporated profits and stock prices—earn the pay?
Accordinfg to a survey by , a California-basedx compensation research firm, median pay for the CEO of a U.S. S&oP 500 company fell 6.8 percent in but still totaled $8.4 million. The media salary rose 6 to $1.06 million, while the median bonuse fell 21 percent, to $1.5 million. “It’s a complex said Janet Marler, associate professor in the Schoop of Business at thestate . “There are peoplr who feel executive payis well-designed and and is the reason U.S.
companies have done so “Others say CEOs are overpaid and that thei r pay has increased more thantheir performance, and that we are now seeiny the results—they are doinfg well and we’re left holdinb the bag,” she added. “There is probably truth in both The Conference Board has formed a task forcw onexecutive pay. Topics of discussionh will include the link between payand performance, ways to improvee public disclosure and the “say-on-pay” movement to give shareholders a voice in executive compensation.
“What I’m hearing from the investment community is that the most productiv e useof say-on-pay would be a referendum on the entire pay philosophy,” DeNicola said. What companies must do, Marler said, is try to “navigates between the two and fashion pay packages that attract and retain skilled executives without angeringthe public. She said few peopld object to performance-based pay—as long as it is set up “I think bonuses are a good she said. “The question is, what performance measures were used? Were they rewarding the right thing?
” , a Menands-basec maker of engineered fabricsand high-performance doors, lost $76 million in after 2007 income of $18 million. And yet, CEO Josep Morone received a bonusof