Posted: 01/22/2009 07:25:44
Advocates of having
public companies allow their owners to express their opinion on how much
companies pay their top brass enter the 2009 proxy season with a head of
Such "say-on-pay" shareholder resolutions
have been filed at more than 100 U.S. companies so far this season —
including Apple, Yahoo, Intel and Hewlett-Packard — according to a network
of more than 70 organizations established in 2007 known as the Interfaith
Center on Corporate Responsibility.
"We're pleased that a number of companies in
the United States already have responded and their boards have agreed to
institute an" advisory vote on executive pay in 2009, according to Timothy
Smith, a senior vice president at Walden Asset Management, one of 11 asset
management firms in the network, which includes public pension and labor
funds, foundations, religious investors, retiree organizations and
"We expect more companies to step forward
this winter and declare their support such as Hewlett-Packard did last
week," Smith said in a statement.
While HP did put out a press release on Jan.
16 saying that its board had decided to allow shareholders to "determine
whether the company should conduct an annual nonbinding advisory stockholder
vote related to executive compensation," the vote on whether to allow a vote
on compensation won't take place until 2010, meaning that HP's shareholders
won't be able to express satisfaction or lack thereof about executive pay
until 2011, at the earliest.
"We have adopted this procedure because
executive compensation involves important issues relating to corporate
governance," said Mark Hurd, HP chairman and chief executive.
Important, but not evidently urgent. HP's
timing allows the company to dodge the issue following a very good year for
its CEO, which leads us to our next item:
HURD'S HAUL: Hurd's compensation for 2008 was
disclosed in the company's proxy filed with the SEC on Tuesday.
Hurd, who has undeniably lit a fire under
HP's stock since becoming CEO in 2005, got $25.4 million in cash last year,
including a $1.45 million salary and $23.9 million in bonus money.
He was also granted stock-based compensation
valued at $7.9 million, earned $98,000 in dividends on his unvested
restricted stock, got $71,482 worth of mortgage assistance under the terms
of his hiring agreement, and sold 400,000 shares from an option exercise
that netted him $10 million.
We've become slightly jaded by huge executive
payouts over the years. But one detail of Hurd's compensation got our mouth
watering. HP reimbursed Hurd for $79,814 for taxes on meals associated with
business travel "in connection with events to which family members were
We're talking food.
We asked HP if it would be possible to get a
figure for the total amount of meal expense on which the tax payment was
based, but have yet to hear back. But let's imagine the feds claim 35
percent and the state of California takes 9 percent. That would make the
value of Hurd's initial food benefit about $181,000. Assuming three meals a
day, every day of the year, that works out to about $165 per meal.
No matter how you cut it, that's a lot of