|| Print ||
|Articles - October 2012|
|Monday, September 24, 2012|
Page 3 of 3
Stock and option awards have proliferated since the 1990s.
This is evident with our sampling of Oregon CEOs: For the first time in five years, possibly longer, stock awards accounted for more pay (38%) than options (17%) and are the largest component.
With so much of it valued in stock, it’s no surprise that CEO pay rises and falls, often in tandem with the company stock price. Stock and option awards accounted for 63% of Equilar’s S&P 500 CEO pay in 2011, and 55% of the 20 Oregon CEOs' pay, up from 43% in 2007.
Restricted stock, subject to vesting periods or other conditions, and performance shares, subject to meeting performance targets, have risen in proportion to options, notes Lindner, after an accounting change in the early 2000s made companies expense option grants the same as stock. Prior to that, options were most of the equity in CEO pay.
14 top 20 CEOs received an increase in total pay this last fiscal year.
CEOs who received less included Precision Castparts’ Mark Donegan, Columbia Sportswear’s Tim Boyle, Mentor Graphics’ Walden Rhines and Umpqua Bank’s Raymond Davis, all companies whose annual net income grew.
Notably, Mentor Graphics faced pressure in recent years from well-known activist investor Carl Icahn, who got three of his nominees elected to the board. But Rhines has led the company back to profitability the past two years, and Mentor’s board has managed to fend off Icahn’s attempts to shake it up, replacing two of his picks this year.
All 20 companies passed their most recent “Say on Pay” votes.
One of the first rules to be enforced from 2010’s Dodd-Frank Act requires companies to hold nonbinding "Say On Pay" votes at annual shareholder meetings, asking investors to OK executive comp plans. This year, Columbia Sportswear had the highest pay approval, 99.6%, while Greenbrier and Schnitzer Steel had the lowest, 52.1% and 58.6%.
Boyd thinks that Say on Pay has had a positive impact on company engagement with shareholders, particularly larger institutional investors. “For the most part they all like it,” he says, “and I think companies are finding value in it. What it’s doing is really opening up the dialog between companies and shareholders.”
CEO pay may be an issue to some investors, but not all. George Hosfield, the chief investment officer of Portland-based Ferguson Wellman Capital Management, which manages more than $3 billion in mostly large-cap equities, says this is not a criterion by which he screens companies. “We’re more concerned with CEO competence than we are the compensation,” he says.
Hosfield says that “the more transparency, more sunlight, the better as a general sense,” but he also worries that the cost of regulations like Say on Pay could hurt performance, especially at smaller companies less able to absorb the cost. “Regulation with respect to how costly and burdensome it is as an impediment to business has gone up exponentially in the last decade.”
The prospect of more Dodd-Frank and other regulations hitting small companies could make it a little tougher for our CEOs to do their job and for boards to govern them. But greater regulation has boosted communication between executives, boards and shareholders, as well as cast much more light on CEO pay. At least for now, the majority of the 20 companies we tracked are making a bigger profit and rewarding their CEOs with a bigger paycheck.
Thursday, January 08, 2015
BY CAMBIA HEALTH SOLUTIONS & OREGON BUSINESS COUNCIL | OP-ED
Businesses have a significant stake in the health of Oregonians. In fact, we cannot succeed without it. By committing to using our companies as levers for good health, we invest in our people, our business, our quality of life and our economy.
Saturday, December 13, 2014
The president of LaPorte & Associates lets us in on his day-to-day life.
Tuesday, January 27, 2015
BY KIM MOORE
Robin Anderson, dean of the Pamplin School of Business, University of Portland: "You need people who are comfortable leading in ambiguity."
Thursday, December 11, 2014
BY JESSICA RIDGWAY
Lawger upends the typical hourly based fee model by letting clients determine the cost.
Thursday, December 11, 2014
BY OREGON BUSINESS STAFF
An SEC rule targets the disparity between executive and employee compensation, reigniting a long-standing debate about corporate social responsibility.
Friday, January 09, 2015
BY JACOB PALMER | OB DIGITAL NEWS EDITOR
Industry groups identify top trends for 2015.
Friday, December 12, 2014
BY LINDA BAKER
Studying ground-running birds, a group that ranks among nature's speediest and most agile bipedal runners, to build a faster robot.
Real Time - Oregon Business
Tweets by @OregonBusiness
|Legislative Preview: A Shifting Balance|
|Tackling the CEO-worker pay gap|
|Corner Office: Pam Edstrom|
|Corner Office: Timothy Mitchell|
|Justice for All|
|Corner Office: Sheree Arntson|
|Radical party's election win in Greece creates shockwaves|
|Flights canceled en masse as east coast preps for blizzard|
|West Coast port talks resume after rallies|
|Consumers pine for better battery life|
|Gates Foundation aims to gradually improve world for the poor|
|European Central Bank announces stimulus measures|
|Netflix reports strong fourth quarter|
Is your business ready to join us in the call for action? This opening panel includes Oregon businesses who will discuss why they signed the Oregon Climate Declaration, the investments they are making to reduce carbon emissions, and how their actions are affecting their companies.
Get ready for two days of special events produced with the EPA, Portland Timbers and ISOS before and after the GoGreen Conference on October 16.
hubbub health uses behavior change science to rethink wellness programs.
In Ashland, a public-private partnership results in online resources to help diversify the local economy.
How sports tourism is driving economic growth and making cities across Oregon a better place to live.
If you have given a former employee access to your company’s electronic information by virtue of assigning a desktop or laptop computer and you suspect he or she of having taken electronically stored data, there are several steps to follow to preserve electronic forensic evidence from spoliation.
The official launch will be Jan. 14.
In a switch on the traditional trade show, representatives from UO departments and local and state agencies will host tables to connect with businesses and vendors. The fourth Reverse Vendor Fair will take place Wednesday, Feb. 25, in Eugene.