CEO Pay And Severance Packages Of 2007

[Godwynn]

Chuck Prince: Citigroup


Linkage

New York - Citigroup Inc, the largest bank in the United States, said on Thursday that its former Chairman and Chief Executive, Charles Prince, will take home roughly $40 million as he retires from the company.

The package is less than a quarter of what former Merrill Lynch Chief Executive Stan O'Neal was awarded when he was ousted from the investment bank last week.

The terms of Prince's retirement include the vesting of options estimated to be worth $1.28 million, the vesting of deferred stock estimated to be worth $16.05 million and the vesting of restricted shares worth $10.7 million.

The package also includes a little more than 83 percent of his 2006 bonus and stock awards of about $23.8 million, adjusted for the total shareholder return for 2007, which is so far a decline of about 38 percent. That totals another $12.3 million or so.

Citi said on Sunday that Prince was retiring amid billions of dollars of expected fourth-quarter writedowns for securities linked to subprime mortgages. Citi wrote down $6.8 billion in the third-quarter.

Citi shares have fallen for eight straight sessions, in a slump that has chopped $48.5 billion off the bank's market capitalization.

All values for shares and options are as of November 2, but Citi's shares have fallen nearly 13 percent since then.

Bob Nardelli: Home Depot


Linkage

Dateline, January 3, 2007: Bob Nardelli steps down as CEO at Home Depot (NYSE: HD). In leaving, Nardelli, who had been at the head of Home Depot for six years, scooped up a severance package valued at about $210 million, kindly tipped his hat, and slid his resume across the desks of Chrysler. Does this make the man an opportunistic corporate blood sucker, an overcompensated leadership figurehead, or just plain shrewd?

There is also the CEO's of Ford and Yahoo! that I did not put in here so I could reduce my blood pressure back to safe levels.

I am wanting to hear ideas of how CEO's should be paid and rewarded.

The best I could come up with was let shareholder's decide base annual salary, and have the bonus depend on the share's performance throughout the year at some predetermined value for every percentage that the stock rises.

 

[Masquerouge]

What's wrong with those salaries? It's obviously the magic of the free market at work, and you are a communist for suggesting that their pay is too high.
/sarcasm.

Totally agree with you. The fact that CEO compensation is so isolated from their company's performance AND shareholders' input is a huge flaw.

 

[Theige]

CEO pay should not depend on stock price.

These two corporations are struggling because of the housing meltdown.

Is the housing meltdown the fault of these CEO's? Not in the slightest.

It doesn't say how long the Citi guy was there, But the Home Depot guy was there for 6 years, during which I'm sure the company performed very well, before the slump in housing.

 

[Godwynn]

Is the housing meltdown the fault of these CEO's? Not in the slightest.

Chuck Prince decided to make a huge wager on MBSs and CDOs.

 

[amadeus]

Do they sign contracts to attract those executives, and if so, why don't they set performance targets that need to be met for them to claim X severance package?

 

[Godwynn]

Do they sign contracts to attract those executives, and if so, why don't they set performance targets that need to be met for them to claim X severance package?

Chuck Prince and Bob Nardelli both signed contracts as far as I know. I wish Citi and HD would have put in performance targets along with the monstrous golden parachutes they were offering.

 

[JollyRoger]

Look at your typical Board of Directors. Most of the insiders are top executives of the company. Most of the outsiders are CEO's and top executives of other corporations. Any contracts they negotiate with a CEO are going to tend to be CEO-friendly rather than shareholder friendly. Not much can be done about it short of shareholder action, which is tough because the Board has already written the rules of such a game to benefit the Board over the shareholders.

 

[Merkinball]

CEO pay should not depend on stock price.

These two corporations are struggling because of the housing meltdown.

Is the housing meltdown the fault of these CEO's? Not in the slightest.

It doesn't say how long the Citi guy was there, But the Home Depot guy was there for 6 years, during which I'm sure the company performed very well, before the slump in housing.

 

[Godwynn]

Ouch! HD went sideways during the housing boom, and now it is getting crushed by the collapse!

 

[mrt144]

the solution as i see it is to not buy stock in companies that pay that kind of compensation for CEOs. any company that is bloated enough to be happy with that crap isn't worth investing. go for the up and comers, not the ones that have reached a point where they can afford to be sloppy like this.

 

[Mark1031]

They deserve this because they work 5000 times harder than the average guy. Stop with the class envy and start working harder if you want to make that kind of money.

BTW I think it is just plain theft using a rigged buddy system of board members. Executive comp above 1 Mill should certainly not be tax deductible for the company although I doubt that would stop them. Also argues for a highly progressive tax at the top levels. Either that or taking to the streets with tourches and pitchforks.

 

[Merkinball]

the solution as i see it is to not buy stock in companies that pay that kind of compensation for CEOs. any company that is bloated enough to be happy with that crap isn't worth investing. go for the up and comers, not the ones that have reached a point where they can afford to be sloppy like this.

This makes too much sense, and doesn't involve government interjection where it isn't needed.

Fail.

 

[Neomega]

They deserve this because they work 5000 times harder than the average guy.

IS this satire? It is impossible to work 5000 times harder than the average worker.

 

[Mark1031]

IS this satire?

What do you think ?

 

[Merkinball]

IS this satire? It is impossible to work 5000 times harder than the average worker.

But it is possible to be as irreplacable as 5000 average workers. And it is entirely possible to be 5000 times more valuable to the life of a company than the average worker. And although they may not "work 5000 times harder" than the average worker, their individual impact on a company could easily exceed 5000 times the contribution of an average lackey on the factory floor.

 

[Mark1031]

But it is possible to be as irreplacable as 5000 average workers. And it is entirely possible to be 5000 times more valuable to the life of a company than the average worker. And although they may not "work 5000 times harder" than the average worker, their individual impact on a company could easily exceed 5000 times the contribution of an average lackey on the factory floor.

But how do you determine whether this is the case? And the determination for salary is the benifit you get from this individual relative to an individual you could get for less not the relative importance of the position for the company.

CEOs in the US are paid massively more than other countries. Why hasn;t globalization impacted their salary?

 

[Godwynn]

CEOs in the US are paid massively more than other countries. Why hasn;t globalization impacted their salary?

I'd say it has, the United States is attracting foreign CEO's and paying them our large salaries.

 

[Theige]

2001 dividend per share: $ 0.04

2007 dividend per share: $ 0.225

 

[Leonel]

I figure the Yahoo! CEO's deserve that much money considering it was their dream, they built it from the ground up and were ridiculously successful. I certainly want to cash in on something that I created from nothing and generates ridiculous amounts of money.

However I figure CEO's of old established companies shouldn't get that much money as they only took the helm.

 

[Godwynn]

2001 dividend per share: $ 0.04

2007 dividend per share: $ 0.225

That doesn't even compare to the 68% loss the stock took over that seven year period.