Breakingviews

Banks risk provoking EU with bonus get-arounds

September 2, 2014

Firms are paying top staff extra “allowances” in response to European bonus caps. That avoids raising base salaries and keeps costs flexible. The risk is that successful avoidance of the rules will prompt policymakers to shift the attack to pay quantum rather than pay structure.

Buffett loses his voice – and maybe some sway

April 23, 2014

The Omaha billionaire said he didn’t vote against Coca-Cola’s controversial pay plan even though he disagreed with it, for fear of sending a wrong signal about the CEO. That’s an odd message to convey. It doesn’t mean Coke shouldn’t hear what its largest owner is saying, though.

Dimon’s pay represents board’s own whale of a fail

January 24, 2014

Giving the chairman and CEO a 73 pct raise, to $20 mln, is unjustifiable. JPMorgan’s core earnings fell, it paid out $20 bln in legal settlements and the stock could only keep pace with rivals. Shareholders should have a loud say against this pay – and lead director Lee Raymond.

No quick fix for long-term bonus plans

September 24, 2013

Fidelity says European executives should wait five years to benefit from long-term bonus plans, even if share grants vest sooner. That makes intuitive sense. But companies may have to pay more to secure top talent as a result. Case-by-case implementation would be wise.

Swiss may show the way on pay

March 4, 2013

Voters in Switzerland have given huge support to curbs on remuneration. State meddling in pay may be clumsy, but private excess is a policy problem when governments have to justify spending cuts. Boards were asking for it. And the legislation rightly shifts power to shareholders.

Citi pay plan raises the bar, just not enough

February 22, 2013

Shareholders forced the mega-bank to rethink its compensation scheme for top executives. New, more rigorous targets for boss Michael Corbat and others are overdue. One important performance metric, however, seems to keep expectations too low.

Yahoo pays up for dream of CEO stardust

July 20, 2012

The fading search firm hopes Marissa Mayer is the ticket to a turnaround. After churning through several CEOs, it’s easy to see why the Google hotshot snagged a $70 mln pay deal. But as J.C. Penney with its ex-Apple boss shows, there are no magic fixes for deep problems.

Shareholder rage at bank pay reaches tipping point

April 27, 2012

A third of shareholders failed to back remuneration reports at both Credit Suisse and Barclays - after a similar protest at Citi. It may finally shame banks into dividing the spoils more equally with investors. But governments and customers will also want their pound of flesh.

GE offers Citi starting point for fixing CEO pay

April 20, 2012

Investors voted against Vikram Pandit’s comp largely due to his wooly incentive plan. Facing similar discontent last year, GE added decent hurdles to better align boss Jeff Immelt’s pay to the conglomerate’s performance and shareholder returns. Citi should go a step further.

New York Times pay structure isn’t fit to print

March 14, 2012

The venerable U.S. newspaper group revealed that it rewards bosses with fat bonuses for a mere 1.6 pct return on capital. That’s a fraction of the company’s cost of funds, and much lower than its own previous standard. A high bar for journalists doesn’t extend to management.