Tom Brown (Bankstocks.com): Dumb CEO Compensation Tricks

[dcollon]

http://www.bankstocks.com/ArticleViewer.aspx?ArticleID=6709&ArticleTypeID=2

 

[ItsAValueTrap]

1- I don't really have a problem with the Christmas bonus described in the article.

 

The real problem is that CEO can find creative ways to enrich themselves in ways that don't show up in regulatory filings.

 

2- There are some CEOs which openly steal from shareholders in massive multimillion dollar deals.

 

Here is an interesting piece on NNVC:

http://seekingalpha.com/article/2010691-nanoviricides-house-of-cards-with-minus-80-percent-downside-strong-sell-recommendation

[oddballstocks]

This stuff is rampant at banks.  Was reading the proxy of a tiny bank recently, the CEO had $11k reimbursed for his country club fees.  Why is the bank paying his dues and fees?

 

When I see these things I don't think about the money.  $11k is $11k, it's not going to make or break the bank.  It's a power thing, this is an executive who's making $400k+ a year in salary.  We're talking about an expense that's 3% of his salary.  He can easily afford the country club, but it's the power he welds over the bank to make it pay, and not have the fees come out of his own pocket.

[tiddman]

I think this is just nit picky.  Sure the $1200 Christmas bonus is a bit silly but totally meaningless to almost everyone involved.  I'd be more concerned about CEO's getting tens of millions of compensation while underperforming.

 

Tom Brown hasn't aged a day in 10 years which I find surprising.  I bet he lost his shirt and then some in the meltdown.  He was super bullish on all parts of the financial sector right up until the point that they became a smoking hole.

[constructive]

Yeah, I'm sure that running an $800M hedge fund, Brown's compensation made small bank CEO compensation look like tiddly winks. Until the meltdown.

 

The real problem isn't executive compensation. It's getting the high level of performance that you're paying for.

[valueorama]

There are also some outrageous perks while getting fired. I have seen management getting to keep the Ipad supplied by the firm. Common, cant the guy afford an ipad for himself when he is paid millions. When a regular employee forgets to return a company supplied Blackberry all hell will break loose.

 

I have seen numerous ways management rip-off shareholders. There are some firms, which start serial companies/spin-off business unit, have same  office address. Management gets to hold positions such as CEO of one firm, chairman in another and get paid for both.

[Guest wellmont]

This stuff is rampant at banks.  Was reading the proxy of a tiny bank recently, the CEO had $11k reimbursed for his country club fees.  Why is the bank paying his dues and fees?

 

When I see these things I don't think about the money.  $11k is $11k, it's not going to make or break the bank.  It's a power thing, this is an executive who's making $400k+ a year in salary.  We're talking about an expense that's 3% of his salary.  He can easily afford the country club, but it's the power he welds over the bank to make it pay, and not have the fees come out of his own pocket.

 

if it's a run of the mill bank I would instantly thow it in the do not invest pile. Because this is the type of CEO who would not want to screw up a good thing and sell his bank (even if it made economic sense), knowing he'd be out of a job (and lose his perks) if he did.