EveryJoe » compensation

Microsoft Cuts Executive Pay

Mark Ellis — Wed, 30 Sep 2009 03:31:56 +0000

Microsoft’s top executives earned less in annual pay and awards throughout the fiscal year 2009, the first year ever for Microsoft to have posted a decline in annual revenue. Despite the usual strength of Microsoft, the technology giant has found itself struggling under the weight of the sagging economy.

According to Microsoft, the fiscal year ended in June saw sales fall 3 percent to $58.4 billion, the company’s first-ever drop in revenue. In response to this, Microsoft has announced that it will reduce spending by $3 billion compared to its original fiscal 2009 spending plan, highlighting that Microsoft will take the path that many other companies have taken to become more successful.

Microsoft’s compensation committee believes that CEO Steve Ballmer is underpaid, but that did not stop Microsoft from cutting his total compensation to $1.28 million, down from $1.35 million in fiscal 2008. However, Ballmer still holds on to 4.8 percent of the company’s common shares, a holding second to only Bill Gates among the company’s executives.

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Post from: EveryJoe

Microsoft Cuts Executive Pay

SEC Chairman: Beware Broker Bonuses

Mark Ellis — Tue, 01 Sep 2009 02:48:14 +0000

As the Securities and Exchange Commission continues to clamp down on unscrupulous Wall Street denizens, Chairman Mary Schapiro has written an open letter to U.S. investment CEOs that warns against using bonuses to compensate brokers. According to Schapiro, such a practice encourages brokers to aim for more sales at the expense of the customer’s interest.

In her letter, Schapiro took note of recent news stories that revealed many CEOs using increased commissions and upfront bonuses to hire brokers, warning that such a practice ends up benefiting the broker more than the customer. By giving brokers large bonuses, Schapiro argues, the brokers feel pressured to do whatever it takes to sell securities, potentially infringing upon their ability to be open and honest with investors.

Brokers who feel that they need to increase their sales volumes may coerce investors into purchasing suboptimal securities or encourage them to purchase more securities, simply to make larger commissions. However, brokers are only supposed to make recommendations to customers based on the customer’s best interest, not their own.

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Post from: EveryJoe

SEC Chairman: Beware Broker Bonuses

Oracle’s Ellison Accepts $1 Salary for 2010

Mark Ellis — Sun, 23 Aug 2009 02:36:17 +0000

Oracle CEO Larry Ellison has decided decrease his annual salary to $1 for the year 2010, according to Oracle’s filing with the Securities and Exchange Commission. The move will shave exactly $999,999 off of Ellison’s income compared to this year, but fortunately for Ellison, the world’s fourth-wealthiest man, his base salary only accounts for about 1.2 percent of his total earnings.

Other massively wealthy executives have paved the way in the field of $1 base salary reductions, such as Apple CEO Steve Jobs and Google founders Larry Page and Sergey Brin. According to Oracle’s filing with the SEC, Ellison’s company wants to provide Ellison full compensation for the “active and vital role” he plays.

Most of Ellison’s wealth comes from the 1.18 billion shares of Oracle that he owns, 23.4 percent of the company’s total shares, and the compensation that he receives in stocks rather than in cash. Ellison founded Oracle in 1977 and the software company has since grown into the third-largest component of the software market, behind Microsoft and IBM.

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Oracle’s Ellison Accepts $1 Salary for 2010

House Committee Limits Bonuses

Mark Ellis — Wed, 29 Jul 2009 22:08:24 +0000

Just as the financial crisis reached its climax, the public was outraged to discover the unbelievably excessive bonus compensations that many Wall Street executives were taking as the rest of the country suffered. Now, the House Financial Services Committee has approved a bill given federal regulators the power to ban incentive pay at banks and shareholders the ability to vote on bonuses.

Under the proposed legislation, the Securities Exchange Commission to prevent any compensation practices that would end up constituting excessive risk. However, the bill still must be approved by the House and the Senate before it gets viewed by the President, so those calling for Wall Street accountability have a while to wait.

The Obama administration has already gone so far to help limit excessive compensation practices on Wall Street, but the new legislation is aimed to quell the political outrage that has stormed since the news of certain executives’ greed broke. There is still plenty of debate surrounding the bill, though, as Republicans have uniformly denied voting for the bill because they believe that the bill would essentially allow the government to decide executive pay.

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Post from: EveryJoe

House Committee Limits Bonuses