Wednesday 2 May This needs to be set against a year when the US stockmarket ended up in December at much the same level it had started out the year, back in January, such a level of increase — even though these increases might be based largely on longer-term equity. This juxtaposition is not going to sit well with US investors who are now well-prepared for a second year of "say-on-pay".

Just look at what happened to Citigroup, which failed to gain majority support for its executive pay policies already this year.

Tech companies have become a drag on economic growth | Asia Times

If that's a sign of the times, we can expect even higher levels of pay protest than were experienced at last year's annual meetings. Reversing the trend in , which saw the largest increases in pay going to CEOs of the largest companies, it is the CEOs of the smallest companies who received the most substantial increases in Similarly to , however, the highest increases in pay were driven by the profits made on stock options or the vesting of restricted stock.

Executive pay and the sleeping time-bomb of stock option grants | Paul Hodgson | Business | The Guardian

There were exceptions to this general rule, however. These three elements accounted for almost half his total pay. So far, we have processed over proxy statements, out of the 3, we will have gone through by the end of June. And who is the highest paid CEO of at this point? Herbalife, best known for nutritional shakes, is a multi-level marketing MLM company — a company in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit.

MLM firms have also been called pyramid-selling companies , though Herbalife denies the term is applicable to its marketing practices.

Travis Johnson, Stock Gumshoe | Stock Gumshoe

Looking at the behavior of Herbalife's stock price recently, some might say that Johnson deserved the profits he made on exercising his stock options. Since then, the stock price has done well.

But then, Johnson exercised 1. When you have that many options to exercise, making large sums of money becomes significantly easier. As of February , he was the beneficial owner of 3.

Other CEOs among the ten highest paid come from more familiar territory.

They include the CEOs of IBM, Tyco, Honeywell International, Marathon Oil, Walt Disney, and Starbucks. As has already been indicated, the CEOs of Honeywell, Marathon and Walt Disney landed on the list at least partially due to large cash bonuses, though they also made substantial amounts from equity. Then again, he also exercised almost 1.

Similarly, Howard Schultz exercised more than 1. Yet another CEO in the top ten made excess option profits that were, at least in part, due to the excessive number of options granted in the first place.

The CEO at TIBCO Software exercised 2.

Thus, we have seven out of the top ten most highly paid CEOs who are there largely because of the profligate stock option grant policies of their boards albeit up to 10 years ago.

I'd say times had changed and that we no longer saw such mega grants of stock options any more — except that is not the case. When the stockmarket collapsed in , the most common reaction in — in order to preserve the estimated value of stock option awards — was to award options over many, many more shares than was typical.

How is that performance-related? So many of these grants were awarded that we, at GMI Ratings, have dubbed this "the sleeping time-bomb of CEO pay".

Just wait until some of these mega grants start being exercised. Shareholders are not going to be happy. No one got to swap out their devalued shares at a 5: Please choose your username under which you would like all your comments to show up. You can only set your username once. International edition switch to the UK edition switch to the US edition switch to the Australia edition. The Guardian - Back to home.

Executive pay and bonuses. CEO remuneration is sharply up again, in More worrisome for shareholders are the profligate stock options held by CEOs. Topics Executive pay and bonuses Opinion. US economy Financial crisis Stock markets Corporate governance Citigroup comment. Order by newest oldest recommendations.

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