Corporate Bonuses to Match Boom
From the Financial Times:Bonuses payments for senior US executives are on track to match levels reached during the last boom, according to early analysis of 2003 figures, as rising awards in cash and shares make up for falling stock options.
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The return of generous compensation packages, triggered partly by last year's recovery in company profits, is likely to reopen the debate about whether management incentives are properly aligned in big companies.
Critics ranging from governance watchdogs to billionaire investor Warren Buffett have argued that pay remains the "acid test" for wider boardroom reforms. They fear little progress has been made. Preliminary analysis by compensation consultants suggests that the criticism of excessive gains from stock options issued during the late 1990s has resulted in companies granting fewer new options in 2003. Instead, the studies of disclosures made mid-way through the reporting season show companies taking more advantage of straightforward cash bonuses or granting shares with restrictions on their use.
Pearl Meyer, a compensation consultant studying 50 of the 200 largest companies to have reported up to the beginning of March, said total cash compensation rose 17 per cent over 2002 levels while the value of stock options fell by a third. "Bonuses are back to the record levels in 2000 and 1999, but options are the lowest we have seen them since 1997," she said.
Paul Hodgson, an independent expert at The Corporate Library, said companies were swapping one form of pay for another. "I have been a little astonished at how little change there has been," he said. "There seems no moderation whatsoever."
Matt's Chat
These are the idiots that John Kerry should be attacking, not the average American small business owner... It just goes to show how far out of touch Johnny really is...or is it that he wouldn't want to reach out and slap the hand that feeds him...Mark's Remarks
Isn't it a fascinating coincidence that the Partisan Media of Kerry Lovers(tm) and the Dimcrapic Attack Goons allied with Kerry shifted focus to national defense and brought out Clarke's book just as more good economic news is on the horizon? Could it be they realized (correctly, for once) that the economy really is better than they are saying and more people are feeling the truth of this? Hmmm....interesting, don't you think?
