Public Companies: Is the belt tightening on exec pay? - The Business Review (Albany):

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Instead, the Glenville-based parent of Trustco Bank more than doublesd the salaries of CEO Robert McCormick and othertop McCormick, who had a salary of $400,000 in now will earn a base of In a proxy statement filed with the , TrustCoi said bonuses had been based on return on equity. An ROE of undeer 13 percent meant no The bank now has decided that this was too given the pressure on banks to shored uptheir capital. It therefore eliminated the bonuws plan.
“This decision reflected the view that it was appropriate in this time of economicc uncertainty for the cash compensation to be less dependeny on the achievement ofperformance standards,” TrustCo’s proxy Bank officials declined further Economic turbulence, along with shifting popular and politicalp sentiment, have public companies all over the countryg rethinking their compensation policies. Bonuses have been at the centefr ofthe storm, especially after the public outrager that followed the payment of $165 milliomn to executives at after the insurance giant was bailed out by taxpayers. But all formws of compensation are getting acloser look.
“It’es obviously a very hot topic—one might even say contentious,” said Paul associate director of the Governance Center of TheConferencs Board, a nonprofit economic research organization in New York “The sentiment has been but the state of the economg exacerbated it.” There are four main components of executivw pay: salaries, benefits, bonuses and stock options. For many performance-based pay makes up more than two-thirds of total compensation. The questiojn at the heart of thedebate is, did the performance—ar a time of sinking corporate profits and stock prices—earn the pay?
Accordin to a survey by , a California-basee compensation research firm, median pay for the CEO of a U.S. S& P 500 company fell 6.8 percent in but still totaled $8.4 The median salary rose 6 percent, to $1.06 while the median bonus fell21 percent, to $1.5 “It’s a complex subject,” said Janet Marler, associatr professor in the School of Business at the state . “There are people who feel executive payis well-designerd and fair, and is the reason U.S.
companies have done so “Others say CEOs are overpaid and that their pay has increasexd more thantheir performance, and that we are now seeing the results—they are doing well and we’re left holdinf the bag,” she added. “There is probably truth in both The Conference Board has formed a task force onexecutiver pay. Topics of discussion will include the link between payand performance, ways to improvse public disclosure and the “say-on-pay” movementg to give shareholders a voices in executive compensation.
“Whart I’m hearing from the investment community is that the most productivwe useof say-on-pay would be a referendum on the entirse pay philosophy,” DeNicola said. What companiew must do, Marler said, is try to “navigate between the two camps” and fashion pay packages that attracgt and retain skilled executives without angeringthe public. She said few peoples object to performance-based pay—as long as it is set up “I think bonuses are a good she said. “The question is, what performancs measures were used? Were they rewardinv the right thing?
” , a Menands-based maker of engineerec fabricsand high-performance doors, lost $76 million in after 2007 income of $18 million. And yet, CEO Josepn Morone received a bonusof $809,300.