Pay

Dodd-Frank sheds surprising light on Wall St pay

2 Apr 2018

The widest income disparities in finance don’t involve the biggest CEO paychecks. And median comp can say more about geography and sector than inequality. The law’s pay-ratio disclosures offer useful data for investors and job seekers, and could revive a debate about offshoring.

UK gender pay gap requires “just do it” approach

28 Mar 2018

Disclosures have revealed discrepancies, especially in finance, which will not close on their own. The state can help. Fining employers which fail to make progress over several years would align the interests of women and investors. CEOs would have to match words with actions.

Elon Musk pay deal is crazy enough to get the nod

20 Mar 2018

The Tesla boss could collect nearly $60 bln over 10 years. That’s excessive and surely unimportant for motivation. Yet it’s built on PR-stunt targets involving sales, EBITDA and market cap exploding 10-fold or more. For investors voting on the plan, it’s like playing the lottery.

Wells Fargo hands CEO perfect financial incentive

15 Mar 2018

Tim Sloan’s 36 pct comp boost may look excessive for a problem bank under Fed censure. But he’s the lowest-paid boss of a major U.S. lender, and his bonus is entirely in shares - so he’ll lose it all if he’s ousted. If his turnaround succeeds, though, he’ll deserve every penny.

Volkswagen investors are stuck in the past

13 Mar 2018

The carmaker’s shares are priced at a 20 pct discount to German rivals Daimler and BMW. That’s despite fast growth, a rising operating margin and scale that gives it an edge in electric vehicles. Cost cuts and a full year without unexpected diesel provisions would help close the gap.

ING pay fiasco confirms banking’s utility status

13 Mar 2018

The Dutch lender has withdrawn a 50 percent salary hike for its CEO following a public outcry. Political opprobrium stems from past state support for banks. The inevitable consequence is that bosses become glorified civil servants. Directors and shareholders take a back seat.

Disney CEO’s pay is a deal too far

8 Mar 2018

The media group’s shareholders voted against plans for Bob Iger’s pay. He made $36 mln for 2017 and will benefit if a $52 bln purchase of parts of Fox goes through. Iger’s job is to make deals work, not just make them, and the board’s is to ensure his presence isn’t “imperative.”

Kardashian slap shows hole in Snap’s accounting

22 Feb 2018

Celebrity sibling Kylie Jenner wiped over $1.5 bln from the disappearing-message app’s wobbly value after she questioned its usefulness. Influential fans attract users – and repel them if they publicly flee. Such assets don’t show on the balance sheet. Maybe they should.

Wall Street turns CEO pay into snowboard cross

16 Feb 2018

Goldman paid Lloyd Blankfein $24 mln for 2017, a 9 pct boost amid a so-so financial showing. That’s less than Morgan Stanley’s James Gorman despite an overall better performance. Mike Corbat’s whopping 48 pct jump at Citi still leaves him off the pace – but they’re bunching up.

Ryanair buyback can only cushion so much turbulence

5 Feb 2018

The no-frills airline boosted earnings in the three months to December but faces a squeeze from pilot salary demands and still-low fares. A 750 mln euro share buyback will smooth the bumps for investors. But it cannot offset the transition to a lower-growth, higher-cost future.

Bad things may come in threes for stock investors

2 Feb 2018

U.S. wage growth and 10-year Treasury yields are both nearing 3 percent. The former may hasten rate rises and erode companies’ profits. The latter will boost borrowing costs and make it less attractive to hold stocks. That could spook an equity market priced for near perfection.

Hadas: Tesla’s $60 billion mistake on pay

31 Jan 2018

The loss-making electric-car maker could hand founding genius Elon Musk that much if all goes miraculously well. The hero-worship approach to compensation made some sense when Tesla was more concept than manufacturer. What it needs now is more boring and bureaucratic competence.

Tesla board drives CEO pay into electric dreamland

23 Jan 2018

Elon Musk will make nearly $60 bln if he hits new targets by 2028, on top of the $100 bln-plus value boost for his existing stake. Musk is critical to Tesla, and he blew through his last goals years early. The new ones are even more ambitious. But incentives can lose meaning.

Wall Street banks need yet another earnings metric

12 Jan 2018

JPMorgan, Wells Fargo and peers already deluge investors with performance measures. But tax cuts will make it easier for them to hit returns targets – and for executives to claim bonuses despite mediocre growth. Pre-tax returns on equity would be a helpful alternative yardstick.

Walmart pay hike is less than largesse

11 Jan 2018

The $300 bln U.S. supermarket chain is raising hourly wages by $300 mln. That’s just a sliver of what it could save through tax cuts, but that may not be the biggest driver anyway. In fact, with super-low unemployment, it’s a wonder Walmart can get away with so little.

German workers may frustrate ECB’s inflation hopes

9 Jan 2018

Industrial staff in Europe’s biggest economy are striking for higher pay. They may, however, trim wage demands in return for flexible working. If pay pressures fail to flare in such a tight labour market, the European Central Bank can hardly count on them surfacing elsewhere.

Investors will only curb CEO pay if forced

4 Jan 2018

The bosses of top UK companies have on average taken a pay cut, according to a new report. Fears of a political backlash made investors more apt to vote against chunky remuneration packages. The restraint may be fleeting unless a weakened government can keep up the pressure.

Deutsche Bank bonus revival sends false signal

3 Jan 2018

A year after curbing payouts, CEO John Cryan has announced a return to “normal” variable compensation. Deutsche needs to retain staff despite subdued markets. With the shares trading at 60 pct of tangible book value, though, investors are still far from a return to normality.

How to know if America’s big tax bet pays off

20 Dec 2017

Republican lawmakers have passed revised tax cuts that give even more breaks to companies and the wealthy. They are banking on those benefits trickling down to average workers. It could come back to haunt them. Breakingviews notes a few ways to measure the policy’s success.

Jefferies bumper pay leaves shareholders wanting

19 Dec 2017

The Wall Street firm’s average comp of $530,000, or 57 percent of revenue, is far more generous than even Goldman Sachs. Reducing it to be more in line with rivals would still leave plenty for workers – and would almost double publicly traded owner Leucadia’s subpar returns.