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Tuesday, November 18, 2014

Watch Videos About CEO Pay Ratio

There are some interesting videos on the internet about the CEO pay ratio.

This one is from WorldatWork TV





Monday, November 17, 2014

How To Deal with Non-U.S. Data Privacy Laws for the CEO Pay Ratio Rule

Some companies with workforces outside the U.S. are concerned that data privacy laws in various non-U.S. jurisdictions will adversely impact the cost and practicability of gathering and verifying the data needed to identify the median of the annual total compensation for all employees, as proposed by the SEC in the CEO pay ratio rule.

It seems as though Monolithic Power Systems, Inc. is trying to address this issue partially on a go-forward basis.  Looks like they are slipping in a specific reference to the CEO pay ratio rule  -- here is an excerpt from a grant letter to recipients of options outside the U.S.:
Data Privacy. In accepting this Option:
  1. You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by and among, as applicable, your employer, the Company and its subsidiaries and affiliates for the purpose of implementing, administering and managing your participation in the Plan, as well as for the purpose of the Company’s compliance with Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which requires certain public companies to calculate and disclose on an annual basis the ratio of the median of the annual total compensation of all employees of an issuer as compared to the annual total compensation of its chief executive officer (the “CEO Pay Ratio”).
  2. You understand that the Company and your employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan and complying with the CEO Pay Ratio (“Data”).
  3. You understand that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purpose of implementing, administering and managing your participation in the Plan and for compliance with the CEO Pay Ratio. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan and as is necessary for compliance with the CEO Pay Ratio. You understand that you may, at any time, view the Data, request additional information about the storage processing of the Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand, however, that refusing or withdrawing your consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.
Source: http://www.sec.gov/Archives/edgar/data/1280452/000143774914019267/ex4-6.htm
 

 

Sunday, November 16, 2014

Very Early Example of CEO Pay Ratio Disclosure

We don't know what the final CEO pay ratio rule will say but that didn't deter the folks at Noble Energy, Inc. from giving us a sense of what their ratio was for 2013. Here is an excerpt from the proxy statement that the intrepid Noble Energy filed with the SEC on March 24, 2014:
CEO Pay Ratio
Our Compensation Committee recognizes that executive compensation is an evolving area. We are still awaiting rules to be adopted to implement certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 relating to compensation clawbacks, hedging transactions, and pay ratio and pay for performance disclosures. In the absence of final rules, our Board has adopted a compensation clawback policy and a policy with respect to the hedging and pledging of our stock, which are discussed elsewhere in this Proxy Statement. In this regard, we have elected to disclose an estimate of the ratio between the pay of our Chairman and CEO and the median for all of our other employees.
Our Chairman and CEO’s annual total direct compensation for 2013 was $9,720,334 as reflected in the Summary Compensation Table. We estimate that the median of the annual total direct compensation of all of our employees, excluding our Chairman and CEO, was $114,376 for 2013. As a result, we estimate that our Chairman and CEO’s total annual direct compensation was approximately 85 times that of the median annual total direct compensation of all of our other employees.
The foregoing estimate may not be reflective of the pay ratio information required under rules, if any, that ultimately are adopted by the SEC.
Wonder what the employees were talking about around the water cooler on that day?  Was it:
  •  our CEO makes a lot more than us, or
  •  I'm so depressed, I didn't realize how many people make more than me, or
  •  I'm so depressed, I've been with the company for 15 years and I only make 10% more than the average, or
  • what the heck is median annual total direct compensation.
 
 
 

Saturday, November 15, 2014

Survey Results - When Will the SEC Approve the CEO Pay Ratio Rule?

I thought the CEO Pay Ratio would be adopted by the SEC on November 12.  Didn't happen.  Here are the results of the survey I launched in October - When will the SEC approve the CEO Pay Ratio Rule?  Almost 50% of respondents believe it will not be until 2015.

By October 31
3%
Week of November 3
0%
Week of November 10
3%
Week of November 17
3%
Week of November 24
0%
Week of December 1
8%
Week of December 8
10%
Week of December 15
8%
Week of December 22

15%
Week of December 29
5%
Later
46%