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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Paul Shread who wrote (45029)	5/24/2003 8:51:18 PM
From: Henry J Costanzo	Read Replies (1) \| Respond to of 52237

<<I was thinking we could head down on Monday. >> OK by me.......so long as we head up when the market opens for trading again on Tuesday.......after the holiday....<VBG>

To: Paul Shread who wrote (45029)	5/26/2003 3:03:45 PM
From: dawgfan2000	Respond to of 52237

Here is some fuzzy math -g/ng- The Rules on Bosses' Pay Seem Written With Pencil By GRETCHEN MORGENSON For all the big lies out there, the one that corporate executives' pay is linked to the performance of their companies takes the prize. No matter how much of the shareholders' wealth goes down the drain, the hired hands in the executive suite keep pocketing preposterous pay and insisting that it is based on results. They have a reason for keeping the myth alive. If an executive's pay exceeds $1 million, companies receive a tax deduction only if the pay is performance-based. So how do executives take home big packages even if their stock lags and they don't achieve the performance goals necessary for their pay to be considered results-oriented by the I.R.S.? Stroll through recent proxy statements and count the ways. One is to lower the bar on the performance hurdles that executives must clear to get bonuses or stock grants. Among the pioneers was AT&T Wireless, which stated in its proxy that factors "including slower-than-anticipated subscriber and revenue growth for the wireless industry, a challenging economy, the earlier-than-expected completion of a significant acquisition, other changes in the industry, and certain strategic decisions during the first half of 2002 resulted in the original targets no longer providing meaningful incentives." So the company's compensation committee reset the performance measures. Nice. The State Street Corporation, a manager of financial assets, announced on May 6 that it was lowering the 18 percent rate at which return on equity had to grow before bonuses could be earned. Now it is 13 to 15 percent. Then there are the companies like the Bio-Technology General Corporation, in East Brunswick, N.J., which blather on about how compensation is based on performance but quietly note that executives can get bonuses when targets are not met if the compensation committee concludes that it's "in the best interests of the company." Dave & Buster's Inc., a restaurant operator, said that while its compensation committee recognized that the company had not met its target for financial performance, its executives received incentive compensation awards based on "leadership skills, planning initiatives and employee development." Although the chief executive's bonus fell 40 percent last year, his salary and bonus together gave him a 7.5 percent raise. "For top levels of senior management in companies such as this, at least 90 percent of any bonus should be based on hard financial targets," said Paul Hodgson, a senior research associate at the Corporate Library, a research group. "And if they are set at the beginning of the year and those targets are not reached, there is absolutely no excuse for the company to adjust targets downward in order to ensure compensation for executives." Representatives of companies who returned calls said their actions were not only fair, but also needed to keep talented executives. At least the change at AT&T Wireless applied to half of its employees, not just top management. The softness in performance targets may explain why executives at so many laggards received pay raises last year. Equilar Inc., a compensation analysis firm in San Mateo, Calif., compared pay at the nation's 450 largest companies with returns in their stocks. Dividing the universe into quartiles, the firm found that while the median market value of companies in the third quartile fell 20.1 percent, their bosses made 4.9 percent more. More amazing, executives at the worst performers received the biggest option grants — a median $4.52 million worth. Shareholders typically can vote on executive compensation only every five years. That makes it even more crucial to be vigilant about stopping the transfer of wealth from owners to executives that corporate compensation has come to represent. nytimes.com