CEO of ailing Punch gets huge wage increase

Punch International, an industrial holding enterprise head-quartered in Belgium, has been cutting back on expenses and staff since early this year. Yet former CEO Guido Dumarey managed to receive a pay rise to one million euro.

As the company is in financial trouble, a capital increase of EUR 20 million (executed this month) is its final attempt to endure the crisis. In spite of this unsteady situation, Dumarey was granted a salary of EUR 1 million a year by Punch’s remuneration committee on April 23rd. The prospectus does not give a motivation for this odd decision.

Dumarey handed in his notice in June, to take responsibility for the bad investments Punch has made. Current CEO Wim Deblauwe has to survive with ‘merely’ EUR 156.420 a year.


De Morgen

Fran

G20 intentions torpedoed by bankers

On the G20 meeting in September, standards were effectuated to confine bank payment to a minimum. Several countries however, such as Britain, Switzerland and the US, disagreed with the harsh measures on bonus restriction. Thanks to tough lobbying of these countries’ bankers, there will be no obliged cap on bonuses and the bank compensation constraint will be confined to the biggest banks and insurance companies.

This implies a great victory for Swiss bankers, as the financial industry in Switzerland is very important and the country risked competitive disadvantage by excluding bank bonuses. Nevertheless, the Swiss regulator said that these bonus payments “must actually have been earned by the company over the long term” instead of being based on reckless risks, an argumentation that is followed by other G20 members. The new strategy becomes operative on January 1.


New York Times

Fran

Richest Indian sets an example for other top executives

Mukesh Ambani, chairman and managing director of the conglomerate Reliance Industries and also India’s richest man, will renounce two thirds of his remuneration to set a personal example of pay restraint. In one of its latest meetings, RIL’s remuneration committee decided to decrease Mr. Ambani’s commissions by 69%, simultaneously with a marginal increase of his wage and fringe benefits. This results in a total income drop of 66%, reducing his salary to 150 million rupees (3,3 million dollars) as opposed to 442 million rupees in 2008.

This event shows us that all around the world, the issue of executive compensation is being handled. The RIL meeting took place a couple of days after Salman Khurshid (the Corporate Affairs Minister of India) urged firms not to give excessive pays to top executives. Earlier, Anil Ambani (Mukesh’s younger brother) decided to relinquish his wage and commissions.


Telegraph

Fran

Revolution on its way?

The results of the annual study of Compensation and Entrepreneurship by J. Robert Scott (an executive search firm) and Ernst & Young LLP (global leader in assurance, tax, transaction and advisory services) showed that in 2009, for the time in ten years, the executive compensation in private technology companies remained flat in contrast to the increase in the private life sciences firms. Not only does this study reveal a potential revolution in executive pay, the results are also used to assist venture capital firms in critical decisions when attracting, rewarding and retaining talented executives.

The base salaries for CEO’s in private technology firms remained steady in 2008-2009 with an average of around $230,000. Concerning the bonuses in 2008, the CEO’s got 64 percent of their target bonus or an average of $61,000, which is a drop of 6 percent compared to 2007. Looking at the private life sciences firms, the average base salary went up by 3.2 percent stating a total of $273,000 in 2009. The average CEO bonus was $48,000 in 2008 or 44 percent of their target bonus. A drop of 29% looking at 2007.

A revolutionary result, because it was the first time in 10 years the investigators didn’t noticed an increase in the technology firms. “In fact, the average increase over the past nine years has been five percent annually." said Aaron Lapat, managing director of the J. Robert Scott organization.

Making a small summary of the survey, we can conclude that the executive compensation at private technology firms didn’t change during 2008-2009 although the salaries and the bonuses dropped.

Reuters

Nathan

Pay czar Kenneth R. Feinberg OKs pay changes for 2 top executives at BofA

After reviews on the pay structure by Kenneth R. Feinberg, the US pay czar, Bank of America cut compensation of two of its top executives.
Both Joe L. Price, Chief Financial Officer, and Barbara J. Desoer, mortgage unit President, will see their salary go down in 2009.

Price's salary was lowered from $800,000 in 2008, to $500,000 this year. Compared to stock awards worth $2.3 million and option awards $1.5 million in 2008, the CFO will receive stock unit awards valued at $5.3 million in 2009.

Desoer, who's in charge of mortgage, home equity and insurance services will also see her annual salary trimmed to $500,000 from $800,000 last year. She will receive stock unit awards valued at $3.95 million, compared to a respective $2.3 million and $1.53 million in stock awards and option awards in 2008.
As for other compensation, such as tax preparation, payment of insurance premiums, use of corporate aircrafts and other perks, both executives are limitted to $25,000. If they have already received more in perks this year, they must repay the difference.

Bank of America is one of the first companies to adjust its executive compensation, but soon many others will have to follow in order to pay back the government the money from the Troubled Asset Relief Program.

The Washington Post

Alexander

Oil and gas executive compensation survey

In order to examine executive compensation in leading energy sector companies, Equilar, Inc., an information services firm which specializes in researching executive pay, was asked to perform a survey, in which they analyzed and compiled pay data in over 34 companies around the world.
The survey contains information about the total annual compensation, which includes base salary, cash bonus payouts, the grant-date value of stock and option awards, and other compensation, for each CEO they studied.
For companies located in the US, Equilar used the Summary Compensation Table of each firm’s annual proxy statement and the Grants of Plan-Based Awards Table. They used the director and management remuneration section for companies abroad.
Next to the total annual compensation, the survey also contains information about retirement plans and change in pay, which represents the percentage increase or decrease in total compensation from fiscal year 2007 to fiscal year 2008.
Finally the survey closes down with a ranking on total 2008 compensation.

Financial Times

Alexander

France pushes G20 to curb bank bonuses

After the G20 meeting in Pittsburgh in September, where standards were implemented on banking pay as a result of the excessive compensations in the financial sector, France said they are not satisfied about the lack of motivation some countries have regarding the need to curb bonuses. Sarkozy will discuss the issue at the follow-up G20 meeting.

The French want to apply the G20 standards before the 2009 bonuses are paid around February and March 2010. Concerns over bonuses have risen again after the news that eight U.S. Banks - which all received support from the government - have set aside around $117.6 billion for 2009 to pay their employees.

All countries must have the same rules about bankers’ pay because otherwise countries with a less strict regulation will have an competitive advantage when attracting executives. The G20 has therefore agreed to stop guaranteed bonuses and will work on its progress to apply all the standards before the bonus season.


Bernard Matthys


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