Executive Compensation

It seems the Fed's new round of easing is attempting to push up stock allocations amongst the peeps. Notice that first round worked: cash allocations are down and bond allocations are way up...next up, get the cash into stocks.

Crowding out private borrowing is what we are seeing.  The US government spends trillions.  The US banks buy more and more of US government bonds at lower and lower interest rates.  At some point, the Federal Reserve hopes that banks, corporations and investors will climb out of the bomb shelter and invest in riskier assets.  I believe that will not happen until it is clear the US government will stand aside and stop interfering.  As

Marc Hodak just published an article in Directorship about myths arising from a simplistic view of compensation.  Marc tackles 7 myths that show the hysteria surrounding not just the banks pay scandals but all public company pay at this time of year (proxy season). An important contribution in this article is his obliteration of the "

The goal of ValueAligned investing is to identify companies with incentive systems that motivate value creating behavior, and to find those companies that either have, or are moving toward, systems that motivate profitless, value destroying growth.  In a new paper (here) compensation consultants and EVA experts Steve O'byrne and David Young, offer investors a guide on

BERK: HT fellow Stern Stewart alum, Patrick Furtaw of SCCO International for identifying our latest ValueAligned bank now officially on the ValueAligned watch list. The Royal Bank of Scotland will ask shareholders to approve a new long-term incentive plan where economic profit growth (EVA growth) is an important (if not overarching performance metric) to determine performance related pay.  The plan also contains performance-vesting deferred shares and clawbacks that assure that short-term EVA growth is

Video: FMN October 2009 - Segment Two: “EVA Momentum: One Ratio That Tells the Real Story” Bennett Stewart, EVA father, talks about his new measure - EVA Momentum - The only ratio that encourages profitable growth. BERK via evadimensions.com

It's bizarre to watch the collectivist instinct of the people that have come to power in this government.  Most of the people come from Academia - like our President, or from government.  Few come from the real world - I guess by their actions and words.  My friend Marc Hodak nails this with the following post concerning Elizabeth Warren - the TARP Czar. Elizabeth Warren is discouraged.  Not with

Valeant CEO's Pay Package Draws Praise as a Model - WSJ.com. In the above article in today's WSJ, G Mason Morfit, chairman of Valeant's board compensation committee and a partner at ValueAct, an activist hedge fund whose 22% stake makes it Valeant's largest shareholder, lays out 6 pay practices that mimic a private equity pay plan in a public company.  While the article does not say what metric -

My friend Marc Hodak writes here about Congress' attempt to eliminate perverse incentives at too big to fail firms.  Of course, Congress does not even know what they are trying to control. He examines 7 questions that the compensation information firm Equilar finds that companies are asking in their recently filed proxies.  Marc is OK

Back in 2006 before the world of finance fell apart, FORTUNE's Shawn Tully wrote an article (here) in which he laid out 5 rules that boards and shareowners should follow when crafting executive compensation.  If only someone listened.  We would not have as many examples of CEO and top executive pay coming so unglued from economic performance. Of course, there are many exceptions like Harsco (HSC),