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Archive for February, 2016

Citi Ceo paid 27% more in 2015

February 20, 2016 Leave a comment

In an advance to proxy materials to be delivered in March, the bank has announced its decision on its Ceo`pay. Mr. Corbat, has been recognized a right to a total $ 16.5 m, only 1.5 m out of that in fixed salary.

 A total $6m will be inmediately paid as a cash bonus. And an additional 9 million will be deferred, subject to the bank`s clawback and key performance metrics observed in the deferral period. The deferral is a must today in pay decisions for financial institutions, as a measure to curb excesive risk-taking by managers, so that profits today are not rewarded inmediately when decisions are yet to produce good or bad results for a certain period. Read more…

Deloitte on the ingredients boards need for success (in 2016)

February 13, 2016 Leave a comment

In a recently published report, Deloitte highlights some concerns boards should have in order to maximize their performance, given the economic and investment environment, and also the current trends relevant shareholders are focusing on these days.

 You can download the report here, (1), but I will in this post refer to one of the topics they deal with, “Innovation”.

 Marc Van Caeneghem and Takeshi Fujii refer to changes in the environment coming from the technological side, (not always but eventually in the shape of disruptive new business models), and from the new relationship among employees and between them and the firm.

 They state that boards need to prepare their organizations to identify and seize opportunities to increase their market share and brand power. And there are two ways boards need to tackle the challenge: (i) they need to assure the firm is aware of how technology helps them do more, (new markets, or more share), and (ii) they should also consider the risk of the no-innovation option.

 In order to do this, Van Caeneghem and Fujii list a number of tasks: Read more…

BBVA: 2015 Compensation Report

February 6, 2016 Leave a comment

BBVA has recently published the mandatory report on 2015`s Compensation for Directors which will be voted in the bank`s next Shareholders General Meeting.

In 2015, it also approved (apart from the 2014 Comp report), a report on its overall Compensation practices for directors, (public companies in Spain need to do this at least every three years).

The bank explains Executive and Non-Executive Directors` compensation in different sections.

I will try to depict the way they calculate variable pay accrued by Executive Directors, as this is critical to evaluate if incentives are correct, if there is a correlation between pay and performance, if the risk is somehow considered, etc.

Which are the metrics for which Executive Directors (EDs) are rewarded? Read more…

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