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|Monday, October 01, 2007|
UNRAVELING CEO PAY
It’s not only about how much, but why.
By Linda Steffen and Bill Smith
As a result of mounting investor pressure in recent years, the U.S. Securities and Exchange Commission has changed the requirements regarding the way companies disclose and value various elements of executive compensation in their annual proxy statements that go to all shareholders.
This year’s Top 50 highest-paid CEOs in Oregon saw a modest increase in their average total compensation. On average, total CEO compensation was $1,881,007, up $59,777 from 2005. The average base salary decreased by a relatively small amount. While the average bonus increased by $170,806, decreases in stock grants and stock option awards respectively tempered the overall increase. Five executives received bonuses of more than $1 million this year, compared to last year’s ranking, when only two executives received bonuses of more than $1 million.
Pay for performance: The new disclosure requirements are intended to help investors evaluate the connection between executive pay and company financial performance. Companies must now disclose the measures, expected levels of performance, the degree of difficulty associated with meeting performance goals, and the logic behind awards.
New reporting requirements enable investors to compare the actual bonus earned for the year with what the CEOs were targeted to receive for expected performance. Twenty companies provided information that allowed for a calculation of a bonus achievement rate (actual bonus amount divided by target bonus amount). By comparing a company’s bonus achievement rate to its total return to shareholders for the year, investors can better assess the link between pay and performance.
In theory, there should be a positive correlation between bonus achievement and total shareholder return — companies with a CEO who’s earned more than their targeted award would be expected to have a positive total shareholder return. Most companies in Oregon showed the expected correlation between the pay and total shareholder return.
Although the new disclosure rules have required companies to provide broader and deeper data, the greatest challenge investors face is finding meaningful ways to interpret this information and form meaningful conclusions not only about how much is paid but also about why various programs are used.
Thursday, July 09, 2015
The sweltering weather didn't keep the crowds away. Although the numbers were down slightly from last year, the Oregon Food Bank raised $850,636 to fight hunger. About 80,000 people attended despite temperatures in the upper 90s.
Thursday, June 18, 2015
While most categories of commercial real estate have performed well, one of the most robust has been apartment buildings.
Tuesday, June 23, 2015
Oregon’s new marijuana law is expected to lead to a bevy of new business opportunities for the state. And not just for growers. Law firms, HR consultants, energy efficiency companies and many others are expected to benefit from the decriminalization of pot, according to panelists at an Oregon Business breakfast meeting on Tuesday.
Monday, July 13, 2015
BY AMY MILSHTEIN | PHOTOS BY JASON E. KAPLAN
Telemedicine, new partnerships and real estate diversification make health care more accessible in rural Oregon.
Wednesday, June 17, 2015
Monday, July 13, 2015
BY KIM MOORE
Revenues in Oregon's private, for profit sector maintained solid growth as the economy continued to rebound.
Wednesday, July 15, 2015
Oregon's roads are crumbling, and revenues from state and local gas taxes are not sufficient to pay for improvements. We asked readers if the private sector should help fund transportation maintenance and repairs. Research partner CFM Strategic Communications conducted the poll of 366 readers in February.
"I feel private enterprises are capable of operating at a higher efficiency than state government."
"This has been used in Oregon since the mid-1800s. It is not a new financing method. This form of financing may help Oregon close its infrastructure deficit by leveraging funds."
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