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|Articles - October 2012|
|Monday, September 24, 2012|
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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.
Tuesday, November 17, 2015
BY LINDA BAKER
The past month has been marked by upheaval in the health insurance markets. I also check in on clients of the Export-Import bank, a federal credit agency that subsidizes, and insures, foreign exports.
Friday, November 20, 2015
PHOTOS BY JASON E. KAPLAN
Saturday, October 24, 2015
BY JACOB PALMER | DIGITAL NEWS EDITOR
What's it like working with your sister and how do you compete in Portland's crowded artisan ice cream space?
Wednesday, September 30, 2015
Oregon Business magazine has named the seventh annual 100 Best Nonprofits to Work for in Oregon. The rankings were revealed Wednesday night during an awards dinner at the Sentinel Hotel in Portland.
Thursday, October 01, 2015
PHOTOS BY JASON E. KAPLAN
Images from the big 2015 celebration of worker-friendly organizations that make a difference.
Monday, September 28, 2015
BY KIM MOORE
A conversation with Jonathan Bennett, managing partner at law firm Dunn Carney Allen Higgins & Tongue.
Monday, September 28, 2015
BY TIM NEVILLE
Betty Roppe steers Prineville into the future.
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Economic diversity has proven a smart strategy for the Port of Hood River. How can other Oregon communities replicate the model?
Phone, Internet needs of small community school districts earn attention of top-five telecom provider.
Farmland LP grows its vision for organic farming in Oregon.
The Salem Convention Center has capped its tenth anniversary year by earning the prestigious “Best of the Best 2015” award from NW Meetings & Events magazine. Selected as the Best Convention/Conference Venue in Oregon by meeting and event planners from Alaska, British Columbia, Idaho, Oregon and Washington, the Salem Convention Center ranked above the Oregon Convention Center and the Portland Art Museum.
The Oregon Cooperative Hall of Fame honors individuals for their outstanding contributions to the successful building and operation of Oregon agricultural cooperatives.
Health insurer reports $10.2 million in net income after taxes through the first nine months of 2015.