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The Corporate Library: The Corporate Library was founded during the summer of 1999 by Nell Minow and Robert A.G. Monks.  The Corporate Library is intended to serve as a central repository for research, study and critical thinking about the nature of the modern global corporation, with a special focus on corporate governance and the relationship between company management, their boards and shareholders.

EComp: Executive Compensation Online Research Tool

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AMR Unions Express Fury Over Management Benefits, Scott McCartney, The Wall Street Journal, April 17, 2003.  "The disclosure Thursday of special payments for top executives at AMR Corp.'s American Airlines touched off a firestorm among employees and threatened to send the world's largest airline into federal bankruptcy court after all."  (Executive Compensation (Management versus Rank and File (Union)))

An Early Advocate of Stock Options Debunks Himself, Claudia H. Deutsch, The New York Times , April 3, 2005.  “Fifteen years ago, Michael C. Jensen, a professor at the Harvard Business School, wrote a paper with Kevin J. Murphy, then a professor at the University of Rochester, that trumpeted some pretty radical ideas for the time. Compensation systems, they posited, prompted chief executives to add revenue, not to increase profit, pay dividends or otherwise reward long-suffering shareholders. Their suggestion was to make stock options a big component of top management's pay, ensuring that they do well only if shareholders do well. "It seemed a way to tie managers tighter to the mast," Professor Jensen recalled recently.  Of course, it turned out to be anything but. In far too many cases, stock options tempted managers to pick strategies, schedule deals and investments, even juggle the numbers, so that the company looked best when it came time to exercise those options." (Executive Compensation (Stock Options))

Are CEOs Worth Their Salaries?, The Washington Post Staff, Wednesday, October 2, 2002.  "As Firms Founder, Critics Question the Pay Formula.  The skyrocketing salaries of corporate tycoons have sparked a heated debate over how to compensate executives at America's largest companies. But the real concern, according to Intel Corp. Chairman Andrew S. Grove, should not be how executives are paid, but how much."  (Executive Compensation | Executives Self-Enrichment | Pay Formulas)  Seminars

At Enron, the Compensation Kept Paying, Albert B. Crenshaw, The Washington Post,  February 16, 2003.  “Last week's congressional report on Enron lays out an amazing array of maneuvers that the failed energy giant used to reduce or eliminate its taxes.  But perhaps the most amazing revelation is its use of executive compensation. Not only did the company manage to pay its executives -- some 200 of them -- $1.4 billion in 2000, but it used those payments to wipe out nearly all of its tax liabilities that year. And it did so by using perfectly ordinary and widely used devices, the kind employed by almost every large corporation.”  (Executive Compensation | Enron)

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Big Bonuses Don't Reflect Big Profits, Bill W. Hornaday, The Indianapolis Star, June 15, 2003.  "Bonuses jumped 75 percent for CEOs at Indiana's largest public companies last year, and nearly half the CEOs saw pay raises that exceeded 26 percent."  (Executive Compensation | Indiana)

Big Companies Get Low Marks For Lavish Pay to Executives, Monica Langley, The Wall Street Journal, June 9, 2003.   "Allstate Corp., Citigroup Inc., J.P. Morgan Chase & Co., Honeywell International Inc. and Walt Disney Co. richly compensate their top executives.  Now they are really paying for it.  All have been ranked among the companies with the worst corporate governance, according to ratings to be released Monday by Corporate Library, a Portland, Maine, governance-research firm. The common thread among them: hefty paychecks and perks to current or former chief executives.  "What the worst boards all have in common is an inability to say 'no' to the CEO," asserts Nell Minow, Corporate Library's editor and founder. "Compensation is the toughest question put to boards and the one they most often fail on."  (Executive Compensation)

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CEO Bonuses Rose 46.4% At 100 Big Firms in 2004, Joann S. Lublin, The Wall Street Journal, February 25, 2005.  “Bonuses for many chief executive officers surged last year amid rising criticism of what some deem excessive compensation, especially in cases where the bottom line doesn't keep pace.  At 100 major U.S. corporations, CEO bonuses rose 46.4% to a median of $1.14 million, the largest percentage gain and highest level in at least five years, according to an exclusive survey by Mercer Human Resource Consulting in New York. Mercer, which began tracking the latest proxy statements of 100 big companies for The Wall Street Journal in 1999, didn't scrutinize any heads of Wall Street firms, where much higher bonuses are common.” (Executive Compensation)

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Deadbeat CEOs Plague Firms As Economy and Markets Roil,  Joann S. Lublin and Jared Sandberg, The Wall Street Journal, August 1, 2002.  “Like many successful chief executives, Alexander E. Benton enjoyed the good life.  There was the $4 million estate on more than six acres near Santa Barbara, complete with Pacific views, pool, formal garden and a wine cellar. In Carmel, Calif., he and his wife had another home, valued at about $1.7 million. Then there was a house in Ventura, which sat on an 8,712 square-foot lot.”  (Executive Compensation (Self-Enrichment & Pay Formula))

Deals Within Telecom Deals, Gretchen Morgenson, The New York Times, August 25, 2002.  "The deals demonstrate how executives, already making millions on stock options from their own companies, were able to enrich themselves through holdings in outside companies from which they bought equipment with shareholders' money."  (Executive Compensation (Telecommunications))

Deciding on Executive Pay: Lack of Independence Seen, Diana B. Henriques and Geraldine Fabrikant, The New York Times, December 18, 2002.  “When America's biggest companies decide how much to pay their top executives, most of them leave the decision to a group of their board members known as the compensation committee. In theory, members of this committee are independent enough of the company's executives to deny them raises or force them to take pay cuts when the company is faring poorly.  In practice it is a different story.”  (Executive Compensation)

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Ebbers Firm Allegedly Got Big Loans From Citigroup: Suit Points to $679 Million Travelers Gave to the Private Holding Company, Jonathan Weil, The Wall Street Journal, October 14, 2002. “A closely held company controlled by WorldCom Inc.'s former chief executive, Bernard Ebbers, received $679 million in loans from the Travelers Insurance subsidiary of Citigroup Inc., adding to the potential conflicts of interest faced by Citigroup in its dealings with WorldCom, a lawsuit alleges.”  (Executive Compensation (WorldCom))

Enron's Way: Pay Packages Foster Spin, Not Results, David Leonhardt, The New York Times, January 30, 2002.  “As the stock plummeted, investors and employees alike were left with big losses.  But one group of shareholders came out ahead – management.  Many board members and top executives managed to sell millions of dollars of shares before the big fall and still have something to show for the stocks once-lofty price.”  ((Executive Compensation)

Excellent Year for Executives, Ben White, The Washington Post, June 19, 2003.  “After dipping in 2001, take-home pay for chief executives at some of the largest U.S. companies swelled last year, driven by fatter bonuses and bigger payouts from long-term incentive plans, a new study shows.  Among the 1,019 public companies studied, the median bonus for chief executives in their posts in both 2001 and 2002 increased about 9 percent, to $451,000. Long-term incentive payouts, meanwhile, nearly doubled, from a median value of around $500,000 in 2001 to over $900,000 in 2002, according to the study, conducted by the Corporate Library, an independent research group, for release today.”  (Executive Compensation)

Executive Compensation—Is The Sky Really The Limit?, John C. Bogle, The Vanguard Group, Before the New York Society of Security Analysts, New York City, NY, February 14, 2002.  "The absurd failure to treat the costs of executive stock options as an expense has also contributed mightily to the overstatement of corporate earnings. Since options involve no charge to earnings, "they're cheap," according to one leading compensation consultant, and that anomaly bears much of the responsibility for the staggering increase in these payments over the years. But stock prices are inherently flawed as a means of compensation. Uncritically, we have come to accept stock prices as a measure of executive prowess and success, ignoring the fact that short-term fluctuations in stock prices are based only tangentially on the level of corporate earnings (even accurately-stated earnings)."   (Executive Compensation)

Executive Pay, Hiding Behind Small Print, Gretchen Morgenson, The New York Times, February 8, 2004.  “Investors have been understandably irate over executive pay recently. But because disclosure in the area is so woeful, they don't know the half of it.  Summary pay tables, required by the Securities and Exchange Commission since 1992, help investors see where their hard-earned money goes. But three areas cry out for reform by regulators: deferred compensation, supplemental executive retirement plans and executive payouts when a company undergoes a change in control.  As Brian Foley, a compensation expert in White Plains, put it, "The big print giveth but the small print giveth even more." And, sometimes, there is no print at all."  (Executive Compensation)

Extra Pay: Many CEOs Receive Dividends on 'Phantom' Stock, Scott Thurm, The Wall Street Journal, May 4, 2006.  “Amid the drive to tie executive pay more closely to company results, a little-known and poorly disclosed practice is allowing many executives to receive hundreds of thousands of dollars a year in dividends on performance stock -- shares that they may never earn.  The money involved isn't huge by the standards of overall executive pay, but it can add up. General Electric Co. Chief Executive Officer Jeffrey Immelt, who gets a growing share of his compensation through what GE calls "performance share units," received more than $1 million last year in dividends on unearned restricted and performance shares.  Gary Neale, chairman and former CEO of NiSource Inc., a Merrillville, Ind., utility-holding company, is in line to receive more than $827,000 in dividends this year on performance shares he hasn't yet earned.”  (Executive Compensation)

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Fed President Attacks Morality of Exec Pay, Andrew Hill, The Financial Times, September 11, 2002.  "US executive pay increases during the bull market of the 1990s may have been morally dubious, Bill McDonough, president of the New York Federal Reserve, said on Wednesday."   (Executive Compensation)

For Executives, Nest Egg Is Wrapped in a Security Blanket, David Leonhardt, The New York Times, March 5, 2002.  "General Electric allows its top executives to contribute money to a retirement fund on which the company recently guaranteed an annual return of at least 10 percent, far better than a typical GE. worker saving money in the company's 401(k) plan can expect.  Tenneco Automotive, which makes shock absorbers, permits its executives to receive a full pension at age 55, seven years before the company's other employees can."  (Executive Compensation)

For Wall Street Chiefs, Big Paydays Continue, Patrick McGeehan, The New York Times, March 23, 2004.  “As investor outrage over executive compensation rattled corporate boardrooms last year, some companies changed the way they set pay for their top officers. But the message apparently did not register on Wall Street, where chief executives like Sanford I. Weill of Citigroup and E. Stanley O'Neal of Merrill Lynch collected their biggest paychecks ever in 2003 - $44 million and $28 million.  Companies that reduced the pay of their chief executives despite healthy performances included MetLife, American Express and the MBNA Corporation. MBNA joined a trend by saying it would curtail the use of stock options. But at Bear Stearns, the big Wall Street investment bank, James E. Cayne received three times as much in stock options as he did the year before. Over all, Mr. Cayne received $27 million last year compared with $19.6 billion in 2002."  (Executive Compensation)

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Global Crossing Cosseted Executives As Pink Slips Loomed, Rebecca Blumenstein, Deborah Soloman and Kathy Chen, The Wall Street Journal, February 21, 2002.  "Like thousands of other laid-off employees, Ms. Hinton was required to take her severance package in spread-out payments rather than a lump sum. With the company's bankruptcy filing, those payments stopped. Medical benefits also were terminated. Many of the workers' 401(k) retirement plans, loaded with Global Crossing shares, became nearly worthless as the stock price plunged."  (Executive Compensation (Global Crossings))

Greed-Mart, Nelson D. Schwartz, Fortune, September 30, 2002.  “If you didn't know any better, you'd almost feel sorry for James Adamson, CEO of beleaguered, bankrupt Kmart. Shuttling between meetings with employees at headquarters in Troy, Mich., and sit-downs with lawyers and creditors in New York City, Adamson has publicly struck a Trumanesque stance, taking full responsibility for the chain's fate and vowing to do whatever it takes to turn Kmart around. "If this company doesn't succeed, it's on my watch," he told a Detroit newspaper this summer. "I'll take the hit."  Actually he won't.”  (Executive Compensation (K-Mart))

Greedy Bunch (The), Mark Gimein, Fortune, September 2, 2002.  "All over corporate America, top execs were cashing in stock even as their companies were tanking. Who was left holding the bag? You."  (Executive Compensation)

Growth of U.S. Executive Pay, Lucian Bebchuk  and Yaniv Grinstein, Harvard Law School and NBER, March 2005.  “This paper examines both empirically and theoretically the growth of U.S. executive pay during the period 1993-2003. During this period, pay has grown much beyond the increase that could be explained by changes in firm size, performance and industry classification.”   (Executive Compensation) Seminar

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 [ I ]

Insiders' Magic Way to Sell:  SEC Investigates Securities Firms That Used Derivatives Contracts To Help Executives Trade Quietly, Randall Smith and Jesse Eisinger, The Wall Street Journal, March 19, 2004.  “The Securities and Exchange Commission, suspecting that numerous corporate insiders may have sold stock in the past six years without proper disclosure to investors, has asked financial firms for data on their transactions with such executives, according to people familiar with the inquiry.  In a "Street sweep," the agency's enforcement division has asked more than a dozen Wall Street securities firms for details on exotic derivatives contracts used since the start of 1998. These contracts were used to hedge or sell the stock positions of the corporate insiders such as corporate officers, directors and holders of more than 10% of a stock.  At issue is how corporate insiders use derivatives -- which are contracts whose value rises or falls based on an underlying stock, bond, currency or index -- to allow them to take gains on their holdings of company stock without immediately selling their shares in the open market."  (Executive Compensation)

Is C.E.O. Pay Up or Down?, Patrick McGeehan, The New York Times, April 4, 2004.  “The message from corporate directors to shareholders who are fuming about elephantine executive pay is: We're working on it. The response they get back may very well be: Thanks, but this is not quite what we had in mind.  On paper, the days of rapidly rising executive compensation appear to be ending. Many excesses of the 1990's have been wrung out, and the chances that chief executives will reap hundreds of millions of dollars from cashing in stock options have diminished.  In reality, most chief executives took home more cash and more stock last year. That is not likely to appease shareholders who are still waiting to recoup their losses from the stock slump that followed the boom. Indeed, some experts on executive pay say they expect the disappointment over this year's pay numbers to prolong the backlash against directors for being too loose with their money."  (Executive Compensation)

Is That Your CEO Cashing Out?, David Leonhardt, The New York Times, April 6, 2003.  "All of these executives sold large piles of their companies' shares in 2002, transactions that are obscured from the view of many investors. Even though stock now constitutes the crux of executive pay — as it has for more than a decade — the sale of shares does not appear in companies' annual listing of executive pay."  (Executive Compensation)

It's Called a 'Loan,' But It's Far Sweeter, David Leonhardt, The New York Times, February 3, 2002.  "No bank would make loans like these.  Insider loans, corporate America has become something of a private bank for its senior executives, who have borrowed millions from their companies.  The loans are yet another creative way for executives to increase their pay. . ."  (Executive Compensation)

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Latest Twist in Corporate Pay:  Tax-Free Income for Executives, Mark Maremont, The Wall Street Journal, December 22, 2005.  “Like most Americans, rank-and-file employees of Home Depot Inc. must reach into their own pockets to pay taxes.  But not Robert Nardelli, the home-improvement retailer's chief executive. Under his employment contract, Home Depot picks up a big chunk of his federal and state income taxes. Specifically, the company is obliged to reimburse its CEO for taxes due on a slew of perks, including a high-end luxury car, his family's travel on Home Depot jets and forgiveness of a $10 million loan. Last year, these payments amounted to at least $3.3 million, topping Mr. Nardelli's $2 million base salary.”  (Executive Compensation)

 [ M ]

Many Ways to Compensate, Ben White, The Washington Post, April 7, 2004.  “Despite rising public outrage and continuing complaints from shareholder groups and politicians, executive pay continues to rise. But while total compensation is up, the content of chief executives' pay envelopes is changing.  A review of dozens of proxy forms filed over the past several weeks indicates that stock options, reviled by some as a chief inflator of the late 1990s market bubble, may be at least temporarily on the wane.  This is in part, experts say, because companies soon may be required to count option grants as an expense against earnings. And it is in part because options are less attractive to employees now than when stock prices -- even of marginal companies with no earnings -- soared ever higher during the bull market."  (Executive Compensation)

My Big Fat C.E.O. Paycheck, Eric Dash, The New York Times , April 3, 2005.  “The spectacle of once-respected corporate titans doing perp walks - Martha Stewart, Bernard J. Ebbers, Richard M. Scrushy, the list seems endless - has pretty well tarnished the title of chief executive. But it has done little, it seems, to scratch the gilt from the corner office.  In fact, the boss enjoyed a hefty raise last year. The chief executives at 179 large companies that had filed proxies by last Tuesday - and had not changed leaders since last year - were paid about $9.84 million, on average, up 12 percent from 2003, according to Pearl Meyer & Partners, the compensation consultants.  Surely, chief executives must have done something spectacular to justify all that, right? Well, that's not so clear. The link between rising pay and performance remained muddy - at best." (Executive Compensation (Pay versus Performance))

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New Executive Bonanza: Retirement, Claudia H. Deutsch, The New York Times , April 3, 2005.  “When Vance D. Coffman retired as chief executive of Lockheed Martin last August, the company wanted to show a little gratitude. So the board endowed a $1.5 million professorship at Iowa State University, Mr. Coffman's alma mater, to honor his steady leadership over 37 years. It also agreed to foot the bill for various expenses, like his country club membership and use of company aircraft, until he steps down as chairman this month at the age of 61." (Executive Compensation (Pay versus Performance))

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Pay without Performance: The Unfulfilled Promise of Executive Compensation, Lucian Bebchuk and Jesse Fried, Harvard University Press, 2004. (Introduction of Book)  (Executive Compensation)

Peer Pressure: Inflating Executive Pay, Gretchen Morgenson, The New York Times, November 26, 2006.  “Like Lake Wobegon, Garrison Keillor’s fictitious Minnesota town where all the children are above average, executive compensation practices often assume that corporate managers are equally superlative. When shareholders question lush pay, they are invariably met with a laundry list of reasons that businesses use to justify such packages. Among that data, no item is more crucial than the “peer group,” a collection of companies that corporations measure themselves against when calculating compensation.”  (Executive Compensation)

Pensions Fall -- Not CEO's Bonus, Jesse Drucker and Theo Francis, The Wall Street Journal, June 18, 2003.  “Companies Shift Compensation Formulas To Preserve Payouts to Their Top Officers - Corporations have been feeling the pinch as ailing pension plans cut into their profits. But several large firms are making sure that one item doesn't suffer: the bonuses paid out to top executives.  For much of the past decade, pensions helped fatten the bottom line at many companies thanks to an accounting quirk, indirectly boosting executive bonuses and incentive compensation, which are typically tied to a company's financial performance.”  (Executive Compensation | Pension)

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Sorry, I'm Keeping the Bonus Anyway, Jonathon D. Glater, The New York Times , March 10, 2005.  “William A. Wise  hit the jackpot when his company hit its number. After the El Paso Corporation, the energy company in Houston, reported a profit of $93 million in 2001, Mr. Wise, its chief executive, was rewarded with a $3.4 million bonus, 768,250 stock options, $1.7 million of restricted stock and $3.7 million in "other compensation." And that was on top of his regular salary of $1.3 million.  Just two years later, however, El Paso had this to say about its performance leading up to Mr. Wise's big payday back then: Oops!  El Paso's board ousted Mr. Wise in 2003, and last year the company reported that it actually had a loss of $447 million in 2001. As it turns out, the company said, "certain personnel used aggressive, and at times, unsupportable methods to book proved" oil and gas reserves. The numbers for other years were wrong, too, it added." (Executive Compensation)

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Well-Hidden Perk Adds Up To Big Money for Executives Deferred-Compensation Plans Give Tax Benefits, But Are Poorly Disclosed and Add to Liability, Ellen E. Schultz and Theo Francis, The Wall Street Journal, October 11, 2002.  “Last year, John R. Stafford, chairman of pharmaceutical giant Wyeth, earned $1.8 million in salary. He also was awarded a $1.97 million bonus, restricted stock valued at $724,283 and 630,000 stock options.”  (Executive Compensation)

What's $13 Million Among Friends?, Lucian Bebchuck, The New York Times, January 17, 2004.  “Ten former directors of Enron have agreed to pay $13 million from their own pockets to settle a class action suit stemming from Enron's collapse in 2001, which wiped out some $60 billion in shareholder value. Because directors almost never have to pay even a penny in such suits, the Enron settlement - announced just days after several former WorldCom directors agreed to a similar deal - was widely viewed as a significant development that could discourage potential directors from serving on corporate boards.” (Executive Compensation)

Where The Jobs Are, David Callaway, CBS Marketwatch, March 18, 2004.  “At last, an answer to why we've seen so few new jobs created in this fragile economic recovery. Sandy Weill has them all.  The chairman of Citigroup and Wall Street's No. 1 rainmaker for the past two decades had a good year in 2003, according to regulatory filings, reaping a $29 million bonus for his efforts as the securities giant enjoyed a robust recovery from the industry scandals of 2002.  Including exercised options, Weill brought home total pay of $44.6 million, according to the filings.   In cash terms alone, his compensation of almost $30 million came out to about $111,000 a day, according to The New York Times.  And that's just for the nine months he spent as chief executive, before turning over the reins of Citigroup to Charles Prince in October."  (Executive Compensation)

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