Top Boss Pay Again In The Spotlight
The Financial Times quotes Henry Waxman, the Democratic chairman of the committee, who said: 'When companies fail to perform, should they give millions of dollars to their senior executives ?'. He also said that 'there seems to be two different economic realities operating in our country. Most Americans live in a world where economic security is precarious. But our nation's top executives seem to live by a separate set of rules'. And Maryland Democrat Elijah Cummings added: 'On the one hand we've got golden parachutes drifting down the golf course, and on the other hand we've got people losing their homes'.
O'Neal stood his corner, however, saying that 'the compensation of senior management at Merrill was determined through a rigorous and independent process, and consistent with pay levels in the industry'. Speaking on the subject of his own exit package, O'Neal said that 'the reality is that I received no severance package. I received no bonus for 2007, no severance pay, no golden parachute. The amount discussed in the press ($161m) consisted mainly of deferred compensation, stock and options that I earned during the years prior to 2007'. The committee did reveal, however, that O'Neal originally sought some $45m in cash severance too, but that Merrill's Board turned him down.
Not all members of the committee, however, were after blood. Virginia Republican Tom Davis said: 'Punishing individual corporate executives with public floggings like this may be a politically satisfying ritual (but) in the end, it won't answer the questions that need to be answered about corporate responsibility and economic stability'.
And it's now been revealed that Goldman CEO Lloyd Blankfein made almost $100m last year, his first full year as head of the firm. Blankfein, 53, bagged $53.9m in basic salary and bonuses, and another $45.7m coming from vested stock. On the same basis, other Goldman executives did well too. Co-Chief Operating Officers Gary Cohn and Jon Winkelreid got $53.04m and $52.9m respectively, CFO David Viniar took $42.5m and CAO Edward Frost got $39.8m.
Finally, The Financial Times reports that several large HSBC shareholders are up in arms about the bank's proposed new executive pay scheme. The newspaper quotes one unnamed top-10 shareholder, who said: 'The company would do well to listen to shareholders and not bulldoze through the pay review. Shareholders are not comfortable. The performance criteria has to be tough enough'.
HSBC has said that 'the consultation is a work-in-progress and, if appropriate, (the executive pay) proposals will be presented to the AGM to vote on'.