CEO Bonus Pay Rises Despite Poor Performances (SLIDESHOW)

Several chief executives were handsomely paid last year even though their company performed terribly, the Wall Street Journal reports.

By most measures, 2008 was a terrible year for home builder Hovnanian Enterprises Inc. Its stock plunged 62%, revenue fell 31% and the company posted a $1.1 billion loss in the fiscal year ended Oct. 31.

Yet Hovnanian's board awarded Chief Executive Ara Hovnanian a bonus of $1.5 million in cash and stock. The reason: Mr. Hovnanian had helped the company stockpile cash, according to Hovnanian's Feb. 4 proxy statement.

Others that profited include Gary Dickerson, the head of Varian Semiconductor Equipment Associates, which posted an income of $98 million in 2008, a 31% drop, and saw its stock fall 53%. Still, Dickerson walked away with a $1.1 million bonus.

Other companies that paid million-dollar-plus bonuses despite weak results include stock-exchange operator NYSE Euronext Inc. and financial-index firm MSCI Inc. NYSE CEO Duncan Niederauer got a $4 million bonus despite a net loss of $738 million and a stock decline of 69%. MSCI CEO Henry Fernandez received a $3 million annual incentive payment even though the company's share price fell 44% and net income declined 16%.

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Edgar Bronfman Jr. received a $3 million bonus in 2008 even though his company, Warner Music Group, lost $56 million and the stock dropped 25%. According to the Wall Street Journal, the board awarded him the bonus because he did a "good job in a tough environment."

Comments

[gemzenith]

I work in a factory.Poor performance gets me shown the door out.I work in a right to work state so I probably wouldn't be able to to collect unemployment..

[kittyarmy]

Meanwhile, the rest of us gets salary freezes & furloughs. Nice.

[Oxonian2001]

Bonuses are downright stupid. It would be as if I gave a student an A+++++++++++++.

Oh, I forgot. That's probably what these "best and brightest" got at school when they turned in D quality work.

[DawnK]

I don't understand. Are all the board members getting million dollar bonus' too? What about the share holders? Don't they have a say? Also, if I hear that it takes this kind of pay and bonus' to get these guys I'm gonna puke. Give me a break. If no company offered million dollar bonus' and salaries that aren't so extravagent then these guys would have no choice but to take what is offered them or be out of a job. If they want to pay me a million dollar bonus and an obscene salary I can do just as good a job running a corporation into the ground.

[americadead]

You know what you all need to do to stop this. Are you all cowards?

http://www.flickr.com/photos/coyote2012/2154407793/

[jeburr24]

Many people are asking how these Wall Street barons can award themselves bonuses while their companies go down the drain. The answer is simple, of course -- these ratbast*rds have so thoroughly rigged the game in their own favor that no matter what happens, they come out of it with piles of cash in their pockets.

They do so year after year because (1) chummy people on corporate boards allow each other to do it, and (2) they have developed lifestyles that DEPEND on having obscene amounts of money year after year, so they have become addicted.

So they follow the modern golden rule: he who has the gold makes the rules. They get all this money not because they've earned it but because they can get away with taking it.

[plaidsportcoat]

Somebody out there - please explain the REAL REAL reason(s) they give these people bonuses. Is there some other deeper philosophy besides keeping a war chest for Class War on the Poor Minions?

[kolorkin]

Do we have much hope really?? Even the SEC supposedly corporate watchdog is corrupt and incompetent.

[kolorkin]

So if these companies can lose so much in profit and share value and yet still somehow award multi-million bonuses to its top executives, then I can't imagine what they would be awarding if the company is MAKING money and doing well. There is something fundamentally wrong with the compensation model here or the employment contract for these executives. What Board of Directors in their right mind would make such decisions...who's sitting on these Boards??? As shareholders, I would first can the Board of Direcotrs!

[MikeNolan]

If I were a stockholder of one of these companies, I would sue for fraud.

[Outraged9]

Continue to write your congressman and woman. This will not stop. AIG is only the latest. Did we already forgot Merrill?
Contact information for all senator and congressman at http://www.returnthebonus.com

[Veratruth]

Now if only some of these so-called executives would do a GOOD JOB for their fellowman in America. Madoof executives did a GOOD JOB for their master, the crook.

[Rule Of Law]

If you are in the Calif bay area tune into KFPA right now to hear how the AIG scam works to pay off Goldman... Do it now

[sirale]

However, like in my company the bonuses of the employees are cut, salaries are frozen and people is being laid off so the executives can enjoy their bonuses as if nothing happen.

[PhilipTaylor]

CORRUPT CULTURE OF WALL STREET MUST RETURN TO THE POST 1929 - FDR ERA!

Whatever happened to people like my Grandfather, an Honest Banker, who lived through the Depression and would not go home until every penny was accounted for even if it was Midnight!

Now we do allow "Off-the-Books" accounting by these WS Banks! And other violations of accounting practices!

He did not risk people's money on stupid Bets or Over Leveraging and he worked until he was 75 and was never called Corrupt and was respected by everyone he knew.

Where is that kind of Banker?

Who the HECK are these people on Wall Street that feel America OWES them $TRILLIONS to repair their TOXIC WASTE and pay their $Multi-Million incomes?