It’s barely a rounding error in their multimillion-dollar pay packages, but America’s imperial CEOs are losing some of the trappings of power.
Companies that once paid for their leaders’ cars and club memberships – and sometimes handed them extra cash to pay the taxes on those goodies – are now taking a principled stand against perquisites.
Among St. Louis firms, Olin and Spartech eliminated their executive perks at the beginning of last year. Express Scripts, Reinsurance Group of America, MEMC Electronic Materials and a few others already had no-perks policies.
Spartech used to give auto allowances of more than $10,000 to some executives. Olin provided company cars along with financial planning services to help executives manage their millions. As of last year, those goodies are gone.
Pay consultant Steven Hall says Olin and Spartech are part of a trend. “In the last few years, companies have been eliminating these kinds of benefits,” he said. “In some cases, the amounts are not meaningful at all, but companies are saying it’s a matter of principle.”
Hall, managing director of Steven Hall & Partners in New York, was speaking about the largest U.S. companies, which tend to be trendsetters in pay practices. St. Louis CEOs, especially at smaller companies, have been slower to give up their perks.
Among 40 St. Louis companies that have made their pay disclosures for 2011, three-fourths offered special benefits to top executives. A car allowance was the most common perk, offered by 17 companies. Fourteen firms let the boss and/or a spouse take personal flights on the company dime, and 12 paid for club dues. Six gave the boss extra cash to pay taxes on the benefits, a practice that shareholder-advocacy groups frown upon.
One of the longest lists of perks went to payday loan.stltoday.com/business/columns/david-nicklaus/smaller-bonus-shrinks-pay-total-for-viasystems-ceo/article_84c7c0e0-7384-11e1-b7ba-0019bb30f31a.html” target=”_blank”>Viasystems Chief Executive David Sindelar: a $33,994 car allowance, $15,337 worth of financial consulting, $31,296 in club dues, $61,603 for entertainment, $6,110 worth of continuing education and $1,000 in charitable contributions. Some of those amounts were grossed up to cover taxes.
The biggest single perk, though, belonged to David Farr, chief executive of Emerson. Farr took $304,007 worth of personal flights on company aircraft, a practice that Emerson justifies on security grounds.
Other frequent fliers included Energizer CEO Ward Klein, who took $176,478 worth of free flights; Brown Shoe Chairman Ronald Fromm ($165,365) and Monsanto CEO Hugh Grant ($124,665).
Free flights seem to be the one perk that isn’t going away, Hall says. Companies justify it based on security – Emerson and others actually require their CEOs to use company planes for all trips – and efficiency.
For watchdog groups, though, such perks are a red flag. They are indicators of an entitlement mentality and a situation in which the board is subservient to an imperial CEO.
As the Corporate Library, a governance-research firm that’s now part of GMI Ratings, said in a 2010 study, “If the board cannot set appropriate limits for the CEO in this regard, will it be able to do so in matters of greater strategic consequence?”
In need of some fash cash? Get instant approval. Apply now for a payday loan or faxless cash advance.
Ukan Nang Ati, 48, used to scrape a living growing opium in the isolated countryside behind the village of Kyauk Ka Chan in Myanmar
If you are interested in getting free instant credit score, here is a reliable site that you can go to for the same.
Shares of H&R Block tumbled 16% in premarket trading Thursday after the tax prep company announced significant staff cuts and office closings, and projected weaker-than-expected earnings.
The company also announced a series of changes in its top executive ranks in its after-hours statement Wednesday, including that it is looking for a new chief financial officer, and that the president of its retail tax services is leaving the company effective April 30.
Shares tumbled $2.74 to $14 ahead of the market open.
The company said it will cut about 350 full-time positions throughout its Kansas City headquarters and nationwide field organization, and close about 200 company-owned offices, which will result in a drop in seasonal temporary employment Payday Loan for Bad Credit.
The moves are expected to save the company of $85 million to $100 million a year. It will take a $30 million charge in the quarter associated with the staff reductions.
H&R Block () also expects full-year earnings of $1.09 to $1.15 a share, well below the forecasted earnings of $1.39 a share.
Senate Republicans are trying an unusual tactic to nullify new labor regulations that would speed up the time frame for unions to hold workplace elections.
The Senate will vote Tuesday on a rarely invoked measure, known as a resolution of disapproval, to overturn rules approved last year by the National Labor Relations Board.
Though the measure has little chance of passage _ it also faces a White House veto threat _ the vote forces Democrats in tough elections to take a stand on rules that have won praise from unions and sharp rebukes from business groups.
The rules simplify procedures and reduce legal delays that can hold up union elections after employees at a work site gather enough signatures to hold a unionization vote. They are set to take effect on April 30.
Unions call the changes a modest fix that would limit corporate stalling tactics, where litigation can delay elections while workers are can be subject to harassment, threats and even illegal firing.
During debate Monday, Republicans claimed the new rules would lead to “ambush” elections that barely leave company managers enough time to respond or counsel against forming a union.
“The NLRB has chosen to impose new rules to aid big labor at the expense of employees, small business employers and the jobs they would create,” said Sen. Mike Enzi of Wyoming, top Republican on the Senate Health, Education, Labor and Pensions Committee.
Sen. Tom Harkin, D-Iowa, called the vote “the latest chapter in an unprecedented Republican assault on unions.” Harkin, who chairs the Senate committee overseeing labor, said employers “have ample opportunity to express their views” on unions.
Business groups including the U.S. Chamber of Commerce and the National Association of Manufacturers have designated the vote a “key vote” _ used to score members of Congress each year on their records. The AFL-CIO has also aggressively lobbied lawmakers to vote against the measure.
International Monetary Fund Managing Director Christine Lagarde said she has received pledges worth about $320 billion so far in her campaign for a bigger reserve to combat threats to global growth.
The bulls weren’t bullish enough.
The stock market just had its best first quarter in 14 years. The surge has sent Wall Street analysts, some of whose forecasts seemed too sunny three months ago, scrambling to raise their estimates for the year.
“That it’s up isn’t surprising. It’s the magnitude,” says Robert Doll, the chief equity investment manager at BlackRock, the world’s biggest money manager.
Doll says stocks could rise 10 percent more before the end of the year. That would be enough to push the Dow Jones industrial average to an all-time high and the Standard & Poor’s 500 close to a record.
For the first three months of the year, the Dow was up 8 percent and the S&P 12 percent, in each case the best start since the great bull market of the 1990s. The Nasdaq composite index, made up of technology stocks, has had an even more remarkable run _ up 19 percent for the year, its best start since 1991.
“I don’t think anyone could have predicted this,” says Chip Cobb, a senior vice president at Bryn Mawr Trust Asset Management. For these gains, he says, “I thought it would take all year.”
The jump gives money managers like Cobb hope that ordinary folks burned by two deep bear markets in a decade will start buying again, propelling the indexes even higher.
In a remarkable act of self-restraint _ or foolishness, depending on your view _ they have mostly stayed out of the market. One reason they may jump in now is that fear of looming disasters, like a full-blown debt crisis in Europe or a second recession in the United States, has faded.
Bulls say investors will turn their attention to the only thing that really matters for stock prices in the long run _ corporate profits.
Another hopeful sign for gains is that those who have been buying stocks appear to be taking bigger risks than before, suggesting growing confidence.
Last year, investors put much of their money into so-called defensive stocks, such as utilities and health care companies, which make money in bad times as well as good. This year, it’s the risky fare that’s being scooped up.
Financial stocks are up 22 percent, the best among the 10 industry groups within the S&P. Technology companies are up 21 percent. Consumer discretionary stocks, like hotels and cable companies, are up 16 percent.
Utilities are down 3 percent for the quarter, the only group in the red.
Standard & Poor’s Capital IQ, a research firm, predicted at the beginning of the year that the S&P would hit 1,400 by the end of the year. By March 15, it had hit 1,403, and on Friday it was at 1,408.
“We were originally accused of being too optimistic,” says Sam Stovall, chief equity strategist at S&P Capital IQ. “It doesn’t mean we can’t have a 10 percent correction, but it’s unlikely we will.”
The Dow is less than 1,000 points away blow its all-time high of 14,164.53, set Oct. 9, 2007. The S&P is about 150 points from its record close of 1,565.15, set the same day.
The first day of the year set the tone. On Jan. 3, the Dow rose 180 points. Later that month, the Federal Reserve said it would probably keep benchmark interest rates near zero for almost three more years. That sent stocks to their highest levels since May 2011.
It was the best January for stocks since 1997. Skeptics pointed out that profits at U.S. companies, after jumping by double-digit percentages for eight quarters in a row, seemed to be growing much more slowly. They also worried that the number of shares of stock traded each day was low, which suggested a lack of conviction by buyers.
Stocks kept climbing anyway, passing two milestones in quick succession.
On Feb. 28, the Dow rose above 13,000 for the first time since May 2008, four months before the financial crisis hit that September payday loan lenders. Two weeks later, it was the Nasdaq’s turn. It crossed 3,000 for the first time since the dot-com frenzy a dozen years earlier.
Even a few duds got caught in the upswing. The stocks of Microsoft and Cisco have barely budged this century. This year, they have have risen 24 percent and 17 percent, respectively. Dell, which has languished for years, is up 13 percent.
Some of the big winners of 2012 are perhaps less surprising: Apple has risen 48 percent. Lions Gate Entertainment, the company behind the hit movies “The Hunger Games” and “Twilight,” is up 67 percent.
As if the surge weren’t enough, the markets impressed long-time stock investors with the way it climbed _ slowly and steadily, without the wild swings of bravado and panic that characterized the market much of last year.
The gap between the daily high and low for the S&P has averaged about 0.9 percentage points. It was three times that early last fall, when the market was obsessed with debt problems in Europe and at home, among other fears.
Investor attention turns next to corporate earnings announcements, which begin when aluminum maker Alcoa, one of the 30 stocks that make up the Dow, reports April 10.
Companies in the S&P 500 are making more money than ever, an impressive feat in a tepid economic recovery.
Those who are bullish on stocks note that the S&P 500 trades at 12.9 times expected earnings this year, somewhat cheap compared with its 10-year average of 14.6.
The so-called forward earnings multiple is generally higher than the long-term average during bull markets. If it rose to 16 or 18 this year, stocks would be significantly higher than they are now, even if corporate earnings failed to grow at all.
Some investors say the bulls are fooling themselves if they think big profits this year are assured. Indeed, first-quarter profits for the S&P 500 are expected to fall 0.1 percent from a year earlier, according to a survey of analysts by FactSet, a provider of financial data.
That would be the first time in more than two years that earnings will not have grown. For the full year, analysts are expecting profits will rise a healthy 9 percent, but those predictions depend on a surge of 16 percent in the last three months.
“The idea that we’re going to have a huge rebound at the end of the year is unrealistic,” says Barry Knapp, head U.S. equity strategist at Barclays Capital.
Knapp says he’s bullish on technology stocks but the rest of the market has “overshot the fundamentals.” He says he’s sticking with his target for the S&P this year: 1,330, which would be a drop of about 6 percent from Friday’s close.
Other skeptics of the surge point to the role of central banks around the world in lifting markets by printing money, lending at near-zero rates and buying bonds and other securities.
The fear is that once that support is removed, stock prices could fall, and all the talk about profits could prove beside the point.
The same day the Nasdaq broke through 3,000 earlier this month, Michael Hartnett, chief global equity strategist at Bank of America, published a report with a curious chart showing how stocks reacted to programs by the Federal Reserve to buy bonds, or big announcements about lending rates.
In every case since the market hit a 12-year low in March 2009, prices jumped on the Fed moves, then fell when the programs ended. A question above the chart asked whether it was time to move more money into stocks.
Hartnett’s answer was no. The bank expects the S&P to end the year at 1,400, almost exactly where it is now.
Let your tax return be a lesson to you.
Next year at tax time, there may be no need to end up the way you did on taxes this year. Many people can improve the outcome with a little advance thought.
You might be able to put more money into your pocket from each paycheck during the year or ensure that you write a smaller check to the IRS, or no check at all, when you sign your tax return at this time next year.
For example, if you receive a big tax refund this year, you probably sent too much each payday to Uncle Sam. You can fix that and have more spending money during the year. Simply go to your benefits office now and change the withholding form.
See the effect on take-home pay by completing the questionnaire at http://www.tinyurl.com/irsquestionaire.
Or if you missed a great tax credit on your tax return this year because your income was too high, you might be able to adjust so you get credits worth thousands on your 2012 tax return. For example, if you are raising a child, there’s a credit worth $1,000. If you are going to college or sending a child to college, there’s another, up to $2,500. If you want to capture the credits for 2012, look for ways to cut your taxable income.
Accountants have many ideas, such as deciding what year a person should receive a big bonus or adjusting what a small-business owner takes out of a business each year. But individuals have a lot of control, even if they simply rely on a basic paycheck. The easiest way to slice income for tax purposes is to contribute more of it to a 401(k)-type retirement plan at work or an IRA outside of work. If you set this up so a little money comes automatically out of each paycheck, it can feel painless.
Anything you save will reduce the income that gets taxed, and the tax reductions help you save more without digging deep into your pocket. Say, for example, you are in the 25 percent tax bracket and contribute $100 a pay period to your 401(k). You won’t really be taking $100 out of your pocket, because the deduction you get on your taxes means your take-home pay goes down just $75.
To see the impact, visit http://www.tinyurl.com/takehomepaycalculator.
Still, cutting income to take advantage of favorite tax credits could end up being futile after the 2012 tax year. Many of the best credits families enjoy, such as the child tax credit or college credit, may be reduced after this year if Congress doesn’t extend the so-called Bush tax credits that were enacted in the early 2000s pay day loans. About $450 billion is at stake.
Given the uncertainty, financial advisers and accountants are having their clients make contingency plans, strategies they will put into action or abort depending on which way the politics takes the tax issue this year.
For the very wealthy, tax advisers are getting clients to get ready to give $5 million to heirs this year because they think a lifetime exemption on gifts might decrease to only $1 million in future years, said Anita Sarafa, a wealth adviser at JPMorgan Private Bank.
Certified public accountant Robert Keebler is suggesting that individuals consider selling before the end of the year stocks or funds that have appreciated significantly since purchased. This will allow taxpayers to take advantage of today’s zero to 15 percent capital gains rates rather than the 20 percent rate, plus a 3.8 percent surtax on high-income earners, for next year. The 3.8 percent Medicare surtax is being challenged. The 20 percent capital gains rate will depend on Congress.
Keebler is encouraging affluent retirees to look ahead at spending needs and possibly pull money out of IRAs for 2013 needs in November or December of 2012, if they see higher taxes coming. That way they can pay federal taxes at today’s 35 percent rate rather than a potential 39.6 percent next year.
With taxable accounts, selling stocks, bonds, real estate or mutual funds at a 15 percent capital gains rate now might make sense if the money will be needed for a big expense such as college tuition in 2013, Keebler said.
Another popular idea is to convert regular IRAs to Roth IRAs so taxpayers won’t have to pay taxes on earnings withdrawn for retirement, and so they can pass Roths tax-free to heirs, Sarafa said.
Even timing charitable contributions becomes tricky, she said. If the highest-income taxpayers will have to pay 43.4 percent next year (personal income tax plus Medicare), waiting until then to make a charitable contribution could provide a more valuable deduction than doing it this year.
Yet, Sarafa notes, “there is talk in Washington to make charitable deductions worth only 28 percent,” so waiting might not make sense.
Salaries of 70 Fannie Mae and Freddie Mac executives will be limited to $500,000 per year and their annual bonuses eliminated amid pressure from Congress to stop the big payouts.
The pay and bonus structure of the government-controlled mortgage giants came under fire this fall after it was revealed that 12 executives got $35.4 million in salary and bonuses in 2009 and 2010. Fannie’s chief executive, Michael J. Williams, received about $9.3 million for the two years. Freddie’s chief executive, Edward Haldeman Jr payday advance low fees., was paid $7.8 million.
The government rescued Fannie and Freddie three years ago after they nearly folded because of big losses on risky mortgages. Taxpayers have spent about $170 billion to prop up the two companies, the most expensive bailout of the 2008 financial crisis.
The European Central Bank is negotiating with Greece on behalf of its member central banks to exempt the Greek bonds in their investment portfolios from a debt restructuring, two euro-area officials said.
The ECB wants to swap the investment portfolio bonds for debt that
U.S. stock futures fell Monday as talks dragged on between Greek political leaders over a fresh austerity package that is required if the debt-ridden country is to get a crucial bailout package.
Dow futures are down 24 points at 12,769. The broader Standard & Poor’s 500 futures fell 4 points to 1,335. The Nasdaq composite futures fell 5 points to 2,519.
The declines follow a big gain Friday on the heels of surprisingly good U.S. employment figures.
In Europe, the leaders of the parties backing Greece’s coalition government are set to hold a second day of emergency talks over austerity measures that rescue creditors are demanding in return for more money.
Fears that a deal won’t emerge have reinforced concerns of a disorderly Greek debt default that could send shockwaves through the global economy. Prime Minister Lucas Papademos will meet with negotiators from the eurozone and the International Monetary Fund in the afternoon and then with the leaders of the three parties backing his coalition.
The parties all publicly oppose steep cuts in private sector pay demanded by the eurozone and IMF, but their backing is needed for the government to reach a deal for the bailout, which must be approved by the Greek Parliament. The new euro130 billion ($171 billion) bailout deal is vital for Greece to avoid bankruptcy next month as it cannot cover a euro14.5 billion ($19.1 billion) bond repayment due March 20 without the rescue funds.
The bailout’s implementation also depends on Greece’s progress in separate talks with banks and other private bondholders to forgive euro100 billion ($131 payday loans.6 billion) in Greek debt, in exchange for a cash payment and new bonds with more lenient repayment terms.
In Europe, the FTSE 100 index of leading British shares was down 0.2 percent at 5,892 while Germany’s DAX fell 0.2 percent to 6,756. The CAC-40 in France was 0.6 percent lower at 3,406.
Oil prices tracked the broader market trends, with benchmark oil for March delivery down $1.17 at $96.67 a barrel in electronic trading on the New York Mercantile Exchange.
Greece will likely remain the focal point over the week, though a raft of corporate earnings, particularly in Europe, and a host of central bank meetings could garner some interest. The European Central Bank’s monthly policy meeting on Thursday could be crucial in determining market expectations of whether there will be further interest rate reductions. Meanwhile, many traders think the Bank of England will clear the way to inject more money into the U.K. economy in the hope of boosting lending.
Earlier Asian shares mostly traded higher as investors there had their first chance to respond to join in the advance generated by Friday’s upbeat jobs data.
Japan’s Nikkei 225 index rose 1.1 percent to close at 8,929.20, its highest closing in more than three months but Hong Kong’s Hang Seng lost 0.2 percent to 20,709.94. Benchmarks in Singapore and mainland China also rose.
Powered by WordPress -- XHTML 1.0