From the corporate governance group, The Corporate Library...
CEOS UP $1.26 BILLION, SHAREHOLDERS DOWN $330 BILLION
The Corporate Library's latest study of executive incentive compensation practices finds in its five-year analysis that twelve large U.S. companies display the most pronounced gap between pay and performance. Within this group, the boards' compensation committees authorized a total of $1.26 billion in pay to CEOs who presided over an aggregate loss of $330 billion in shareholder value.
Each of the twelve companies earned a High Risk rating from The Corporate Library; paid their CEOs in excess of $15 million in the last two available fiscal years; brought a negative return to shareholders over the last five years; and underperformed their peers over the same period. "While there are a few companies in this year's Pay for Failure report that also featured in the first report published in 2006, there are seven new companies, many of them suffering from the same compensation faults," said the report's author, Senior Research Associate Paul Hodgson.
This year's Pay for Failure companies are:
"¢ Affiliated Computer Services, Inc.
"¢ Dell Inc.
"¢ Eli Lilly and Company
"¢ Ford Motor Company
"¢ Home Depot, Inc.
"¢ Pfizer Inc.
"¢ Time Warner Inc.
"¢ Verizon Communications Inc.
"¢ Wal-Mart Stores, Inc.
"¢ Abbott Laboratories
"¢ Qwest Communications International Inc.
"¢ Wyeth
The complete study examines in detail the incentive policies at each of the twelve companies, finding high proportions of fixed pay, poorly-chosen performance metrics, and rewards for below-median performance. The report also looks at the makeup of the compensation committees at the companies, listing the members by name, along with their compensation.
For more on this, from Reuters, click here.
