April 2017 L-BLAST: Compensation Media Bias | How Public Outrage Affects CEO Pay | The “Buy Side” View on CEO Pay

Dear All,
We hope everyone had a wonderful Easter with family and friends. It is hard to believe we will be in May next week and proxy season will almost be over. We have some great reads for you this month that we hope you will enjoy.

The first article is an L&A original regarding media bias when it comes to compensation. It references an article about a not-for-profit CEO receiving a retirement package after 19 years of service and having some company employees angry about the payout because they felt it was an excessive payment. We at L&A point out the relative comparisons that deal with these issues daily and offer a few points for perspective.

The second article is how the public and the media affects CEO pay. This interesting article explains how the public and the media have more influence on how CEOs are paid than most of us probably realize. It investigates whether there is a link between the sentiment expressed in the news about executive pay and how the pay was paid out. We know you will find this one to be very
thought provoking.

The third article is about executive compensation being highly controversial with most Americans feeling that CEO compensation among large publicly traded corporations is a problem. This article goes in depth to discuss how executive compensation practices have changed in the recent years, metrics to link management pay to company performance as well as many other comparisons.

Our last piece is L&A being named of one of the Best Companies to Work for in Texas for the SEVENTH year in a row. We are very proud of this major accomplishment and like our mentor and client, Herb Kelleher use to tell my partner, Chris Crawford and I, “A satisfied and happy team will always be the best prescription for exceptional client service”.

As always, please let us know if there are any topics you’d like to learn more about. We appreciate each one of you.
 
 
Sincerely,
Brent_Signature_white

Brent Longnecker and the L&A Team
Chairman and CEO
Longnecker & Associates
 


Compensation Media Bias

An article was recently published regarding the CEO of a not for profit, Health Care and Rehabilitation Services. Judith Hayward, the CEO, is reported to have received a $650,000 retirement package after 19 years of service. The author highlights the problematic excessive payment and the anger of some company employees. In the author’s words, “this story is not new.” However, it does create division and solicits a response which was likely the author’s intention.
 
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How Public Outrage Affects CEO Pay

Compensation changes but does not always decline.
The public has been concerned about income inequality for at least twenty years, says Camelia M. Kuhnen, an associate professor of finance at Kellogg School of Management. Long before there was an Occupy Wall Street, articles in the press were denouncing excessive compensation. What, if anything, she wondered, was the effect of all this negative press on how firms paid chief executives?
 
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The “Buy Side” View on CEO Pay

Executive compensation is a highly controversial topic. Seventy percent of Americans believe that CEO compensation among large publicly traded corporations is a problem. [1] Twenty-five percent of directors believe that CEOs do not receive the correct level of pay based on the expected value of awards when they are granted; and 30 percent of directors believe that CEOs do not receive the correct level of pay based on what they actually realize when those awards vest.
 
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L&A Named One of the 2017 Best Companies
to Work for in Texas for Seventh Year in a Row

For the seventh year in a row, Longnecker & Associates was named one of the 2017 Best Companies to Work for in Texas. Out of the 100 companies given this distinction, L&A took the number six spot this year.
 
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