inokyfyli.blogspot.com
The company’s sale to may be off the tableafter U.S. Bankruptchy Judge Robert Faris delayexd ruling onthe company’s bid to buy Hilo Hattiew for $1 million. The ownership transfer was announcerd on Mondayin U.S. Bankruptcty Court in Honolulu, where Faris also continuer until June 29severakl motions, including one to appoint a trusteed to take over management of the Faris also suspended Hilo Hattie’s ability to borroe money under a line of Maui Divers Jewelry had offeref last month to buy Hilo Hattiee and its seven stores for $1 million in and to invest another $2 millionm in the business.
Maui Divers’ attorney, Cuylae Shaw, told Faris that the offer was off the tablwe if the judge did not approve the saleon Monday. Maui Divers President and CEO Bob Taylor said througn a spokeswoman Monday afternoon that the companyy would hold its offe r open until thenext hearing. Hilo Hattie attorney Jameas Wagner told the judge thatDonalf B.S. Kang, owner of , acquired 100 percent of the company’es shares on Friday from , which boughrt Hilo Hattie from founder Jim Romib last year before filing for Chapterr 11bankruptcy protection. Kang is also on the boar d of directorsof .
Hilo Hattier CEO Ted Nelson and President John Scotrt resigned from their positions on Friday and Kang has assumed the post of president of Hilo Wagner toldthe court. Royalo Hawaiian Creations was listed as the second largest owed morethan $798,000, when Hilo Hattide filed for Chapter 11 last Oct. 2. It is owed anotherr $252,000 in an administrative claim, according to court Maui Divers was thelargest creditor, owed $1.25r million, and Taylor was co-chairman of the committeed of unsecured creditors until resigning in mid-May, priorr to making the offer.
Royal Hawaiian Creationsw also resigned fromthe committee, whic h supported the sale of Hilo Hattie to Maui Kang proposes to fund a line of crediy for Hilo Hattie with $1 million in and “will arrange for an infusion of $2 milliohn in working capital” into Hilo Hattie upon its emergenced from bankruptcy, according to a document filed on Mondayu before the hearing. Kang said he planx to follow the plan of reorganization submittee by Hilo Hattie andits parent, Ltd.
, last week, which calls for paying unsecured creditors about 5 cents on the Wagner told the judge that the reorganization plan filed on June 15 “was a placeholder,” becaus the sale to Maui Divers had not been He said he didn’t expectg any change in the treatment of the company’ws hundreds of creditors under Kang’s ownership. The 46-year-old which claimed $23.5 million in debt in the Chaptee11 filing, has been losing money “at a clip of $500,000 per month,” Ted Pettit, attorney for the committee, told the judge.
Pettir also said he was “veryg surprised” to learn of the stock transfer on Friday He notedthat Kang’s business is in manufacturinv apparel overseas, and said that Kang intendedx to take over Hilo Hattie’s Nimitzs Highway headquarters and turn it into a Kang said after the hearing that he intended for the building to remain as a store and administrative offices. But the judges expressed concern that Maui Divers had not reacheed agreement withHilo Hattie’s most of whom have given the companyu substantial rent relief, for its seven Pettit said that some landlordsz were hesitant to negotiate until they knew for sure whether Maui Diveres would be the new owner.
Farise also considered the transfer of stoc k to Kang as a secondx offer forHilo Hattie, and noted that Kang proposedr to pay back rents in full. “It seem s we have a second he said. “It may be a bettef offer.” Nelson said that he had had discussions with Kang over the last severaol months and said Kanghad “continuouslh offered to be as helpful” as he “Ultimately, I want to do what’s best for the Nelson said after the hearing. “The perfect solutionh to a difficult situation would be to hand the keysto Mr.
Although Royal Hawaiian Creations is amanufacturing business, Kang had operateed two stores in Waikiki called Royal Creations from 1982 to 2008. He bough the shares for Hilo Hattiw because he felt there was an opportunityy to savethe brand, which he is committes to continuing. He said his plan is “too improve efficiencies, to reinstate the vendor relationships and encouragdehigher productivity” among the company’ds 200 employees. Hilo Hattie has seven stores, includinv its leasehold headquarters building on Nimitz which houses its flagship offices andwarehouse space. The buildin g is on the marketfor sublease.
Sunday, May 15, 2011
Friday, May 13, 2011
Termini acquires AM&A's warehouse - Houston Business Journal:
http://www.peoplespharmacy.com/build/mt-cp.cgi?__mode=view&blog_id=1&id=993
According to public documents filed late Thursday in the ErieCounthy Clerk’s Office, Termini’s H@Lofts LLC paid $720,00 for the historic building. The building had been ownec by New HorizonsAcquisitions LLC, a Long Island-basec development firm. Termini is in the early stageds of renovating theformed warehouse, parts of which date back to the late 1800s, into a mixed-usew development anchored by 47 market-rate apartmentes and 15,000 square feet of office space. P&Bg Acquisitions will occupy theofficer space, while Termini said he is compiling a rapidlh growing list of prospective tenanta for the apartments. Termin i will be investing morethan $11 million in the project.
The which is being called the H@Lofts, is expectede to welcome its first residential tenantsnext spring. In the meantime, Terminki is talking with local and state officials about incentive packagea needed before he can acquire the flagship AM&A's department store building on Main Street from New Termini predicted the cost of renovating the buildinv between $80 million and $100 He said it would only be possible with a heav y influx of public sector dollars and The developer said it may take him more than one perhaps as long as 18 to secure all the necessary public-sector dollars he neede for the AM&A's department store project.
The formedr store, which has been closedc since 1995 -- save for a brievf run as Taylor’s Departmenyt Store -- will likely be used as a mixed-use developmen t project, also anchored by residentialp units.
According to public documents filed late Thursday in the ErieCounthy Clerk’s Office, Termini’s H@Lofts LLC paid $720,00 for the historic building. The building had been ownec by New HorizonsAcquisitions LLC, a Long Island-basec development firm. Termini is in the early stageds of renovating theformed warehouse, parts of which date back to the late 1800s, into a mixed-usew development anchored by 47 market-rate apartmentes and 15,000 square feet of office space. P&Bg Acquisitions will occupy theofficer space, while Termini said he is compiling a rapidlh growing list of prospective tenanta for the apartments. Termin i will be investing morethan $11 million in the project.
The which is being called the H@Lofts, is expectede to welcome its first residential tenantsnext spring. In the meantime, Terminki is talking with local and state officials about incentive packagea needed before he can acquire the flagship AM&A's department store building on Main Street from New Termini predicted the cost of renovating the buildinv between $80 million and $100 He said it would only be possible with a heav y influx of public sector dollars and The developer said it may take him more than one perhaps as long as 18 to secure all the necessary public-sector dollars he neede for the AM&A's department store project.
The formedr store, which has been closedc since 1995 -- save for a brievf run as Taylor’s Departmenyt Store -- will likely be used as a mixed-use developmen t project, also anchored by residentialp units.
Tuesday, May 10, 2011
Dollar General fined for lead paint toys - The Business Review (Albany):
ugefuk.wordpress.com
The Goodlettsville, Tenn.-based discoun t retailer—which has five stores in the Albany, area—is one of nine companieds that U.S. Consumer Product Safety Commission is finingt for violating the federal leadpaing ban. The penalties settle allegations that the firmsknowingluy manufactured, imported or sold toys and other children’s articles with paint or other surface coatings that containes lead levels in violation of federal law, according to a statementt by the Consumer Product Safety Commission. In agreeingf to settle the the firms denythe commission’s allegationas that they knowingly violated the law.
The products containing the lead were recallec in 2007and 2008, and include items such as toys, children’es metal jewelry, children’s pens, metal wated bottles, pencil pouches, sunglasses and Halloween pails and Tests showed that paint or surfacse coatings on these children’s products contained lead in excess of 0.06 by weight. One firm’s testing revealed that its productxs contained surface coatings with nearly 60 percent In 1978, a federalo ban was put in place which prohibite d toys and other children’s articlews from having more than 0.06 percent lead (by in paints or surface coatings.
Lead can be toxic if ingested by yountg children and can causr adversehealth consequences. • , of Md., $100,000 • , of Matthews, $75,000 • , of Oklahoma Okla., $50,000 • , of Hong Kong, $50,00 0 • , of Irving, Texas, $45,000 , of Cockeysville, Md., $40,000p • Raymond Geddes & Co, of Baltimore, Md., $40,00p • , of Yarmouth, Maine, $30,000
The Goodlettsville, Tenn.-based discoun t retailer—which has five stores in the Albany, area—is one of nine companieds that U.S. Consumer Product Safety Commission is finingt for violating the federal leadpaing ban. The penalties settle allegations that the firmsknowingluy manufactured, imported or sold toys and other children’s articles with paint or other surface coatings that containes lead levels in violation of federal law, according to a statementt by the Consumer Product Safety Commission. In agreeingf to settle the the firms denythe commission’s allegationas that they knowingly violated the law.
The products containing the lead were recallec in 2007and 2008, and include items such as toys, children’es metal jewelry, children’s pens, metal wated bottles, pencil pouches, sunglasses and Halloween pails and Tests showed that paint or surfacse coatings on these children’s products contained lead in excess of 0.06 by weight. One firm’s testing revealed that its productxs contained surface coatings with nearly 60 percent In 1978, a federalo ban was put in place which prohibite d toys and other children’s articlews from having more than 0.06 percent lead (by in paints or surface coatings.
Lead can be toxic if ingested by yountg children and can causr adversehealth consequences. • , of Md., $100,000 • , of Matthews, $75,000 • , of Oklahoma Okla., $50,000 • , of Hong Kong, $50,00 0 • , of Irving, Texas, $45,000 , of Cockeysville, Md., $40,000p • Raymond Geddes & Co, of Baltimore, Md., $40,00p • , of Yarmouth, Maine, $30,000
Sunday, May 8, 2011
High levels of optimism yield better salespeople and better sales results - Minneapolis / St. Paul Business Journal:
iwibacibem.wordpress.com
Here’s a thought: Take a look at a soft emotional intelligencre skill that yields hardsales results: There is evidence that supports the theory that salex teams possessing high levels of optimism make companies more One of the best case studies comes from the work that psychologistg Martin Seligman did with in New York. He convincer to give him access to their new employees and administer the usual testing, as well as a new test he developecd that measured optimism. He followed the progressw of new salespeople for one year and founx that salespeople who scored high in optimism sold 33 percenf more insurance than thosse whoscored low.
After two years, the optimistic grouop of salespeople were thriving intheif positions, which increased retention, decreased the costs associatedd with turnover and increased How optimistic is your organization There is a lot of press on the swine flu, and peopler are worried about catching it. There is anothee epidemic to watch out forin today’sz economy: pessimism. It can be deadlyh when it hits an organization because emotionsare contagious. The clinical term is emotional contagion and is definecas “the transmission of moods.” When peopled are in a certain mood — happgy or depressed — that mood is often communicates to others.
What is the mood at your company?? What message is the leadershipo team sending yoursales team?? What is your sales team communicating to your customers and prospects? A sales managef shares the story of a rep who started every conversation in the last downturjn with, “You probably don’t have any money so you don’t want to buy …” The self-fulfilling prophecyg was set by the salesperson, and the prospect followed the salesperson’s lead. No So what can you do to stop the epidemic ofpessimism ? Study and duplicate optimistivc salespeople. When faced with adversity, optimistix salespeople ask themselves: • What’s good about this?
They know that adversity is wherde true character is formed and great lessons are Optimists take advantage of this schooling becausee they know that lessons learned today make money inthe • What can I do about this situation? Optimists know that control equals action yields results, and resultes increase motivation. • What is funny abou t this? Humor is a great way to relieve stress which frees up the mind for creativitytand innovation. They choose their friendsz wisely. The motivational speakedr Jim Rohn says, “You are the average of the five peopld you spend the mosttime with.” Are you hangingg out with optimists or pessimists?
What kind of emotion is gettingb spread among your peerse and colleagues? Is it healthy conversation or a new versiob of pessimistic flu? They remind themselves that adversit y is temporary, not permanent. If business is a littled slow, optimistic salespeople speed it up by taking care of theierbest assets: existing customers. Optimistic salespeople take control. They know saless is the greatest profession to be in duringya recession. They can increase their prospecting activity without runnin g it through a boardof directors. They can meet with mentors who can help them look at anothere way of doing business intougnh times. They can outwork their competitors.
They can invesyt in learning and outsmart their Optimistic salespeoplemanage results, not excuses.
Here’s a thought: Take a look at a soft emotional intelligencre skill that yields hardsales results: There is evidence that supports the theory that salex teams possessing high levels of optimism make companies more One of the best case studies comes from the work that psychologistg Martin Seligman did with in New York. He convincer to give him access to their new employees and administer the usual testing, as well as a new test he developecd that measured optimism. He followed the progressw of new salespeople for one year and founx that salespeople who scored high in optimism sold 33 percenf more insurance than thosse whoscored low.
After two years, the optimistic grouop of salespeople were thriving intheif positions, which increased retention, decreased the costs associatedd with turnover and increased How optimistic is your organization There is a lot of press on the swine flu, and peopler are worried about catching it. There is anothee epidemic to watch out forin today’sz economy: pessimism. It can be deadlyh when it hits an organization because emotionsare contagious. The clinical term is emotional contagion and is definecas “the transmission of moods.” When peopled are in a certain mood — happgy or depressed — that mood is often communicates to others.
What is the mood at your company?? What message is the leadershipo team sending yoursales team?? What is your sales team communicating to your customers and prospects? A sales managef shares the story of a rep who started every conversation in the last downturjn with, “You probably don’t have any money so you don’t want to buy …” The self-fulfilling prophecyg was set by the salesperson, and the prospect followed the salesperson’s lead. No So what can you do to stop the epidemic ofpessimism ? Study and duplicate optimistivc salespeople. When faced with adversity, optimistix salespeople ask themselves: • What’s good about this?
They know that adversity is wherde true character is formed and great lessons are Optimists take advantage of this schooling becausee they know that lessons learned today make money inthe • What can I do about this situation? Optimists know that control equals action yields results, and resultes increase motivation. • What is funny abou t this? Humor is a great way to relieve stress which frees up the mind for creativitytand innovation. They choose their friendsz wisely. The motivational speakedr Jim Rohn says, “You are the average of the five peopld you spend the mosttime with.” Are you hangingg out with optimists or pessimists?
What kind of emotion is gettingb spread among your peerse and colleagues? Is it healthy conversation or a new versiob of pessimistic flu? They remind themselves that adversit y is temporary, not permanent. If business is a littled slow, optimistic salespeople speed it up by taking care of theierbest assets: existing customers. Optimistic salespeople take control. They know saless is the greatest profession to be in duringya recession. They can increase their prospecting activity without runnin g it through a boardof directors. They can meet with mentors who can help them look at anothere way of doing business intougnh times. They can outwork their competitors.
They can invesyt in learning and outsmart their Optimistic salespeoplemanage results, not excuses.
Friday, May 6, 2011
Catholic gathering to fill HSBC Arena - Business First of Buffalo:
yfimuna.wordpress.com
Corapi will highlight an Aug. 15 conference put togethe r by WLOF-FM (101.7), a Catholic radio statiob that bills itselfas “Station of the Cross.” Bishop Edward Kmiecx will celebrate a mass during the conferencs and such national speakers as EWTN ancho r Raymond Arroyo and Jerry Usher, host of the “Catholic Answers series, are also slated to appear. The religiousx star power is expected to fillall 14,00p available seats in HSBC Arena. Officials said more than 4,50 out-of-town visitors are expected as the eventis Corapi’ only scheduled live appearance for the Groups are expected from Nebraska and Canadiamn provinces for the conference.
“This one-of-a-kinc event will bring people to Buffalp who might not have otherwise come saidFletcher Doyle, conference communications “It will certainly give Buffalo a lot of attention, especiallt with the Catholic Representatives from the are predicting as many as 2,000 hotelk room nights will be sold because of the
Corapi will highlight an Aug. 15 conference put togethe r by WLOF-FM (101.7), a Catholic radio statiob that bills itselfas “Station of the Cross.” Bishop Edward Kmiecx will celebrate a mass during the conferencs and such national speakers as EWTN ancho r Raymond Arroyo and Jerry Usher, host of the “Catholic Answers series, are also slated to appear. The religiousx star power is expected to fillall 14,00p available seats in HSBC Arena. Officials said more than 4,50 out-of-town visitors are expected as the eventis Corapi’ only scheduled live appearance for the Groups are expected from Nebraska and Canadiamn provinces for the conference.
“This one-of-a-kinc event will bring people to Buffalp who might not have otherwise come saidFletcher Doyle, conference communications “It will certainly give Buffalo a lot of attention, especiallt with the Catholic Representatives from the are predicting as many as 2,000 hotelk room nights will be sold because of the
Tuesday, May 3, 2011
NCR refutes criticism from Ohio officials - Birmingham Business Journal:
http://infotreksys.com/protection.htm
The (NYSE: NCR) when Dayton-areqa and Ohio leaders tried to contact the compan about rumors it wasleaving town, saying NCR oftenm did not return calls or NCR issued a statement stating its side of things and implying its level of interaction with local and state officials was misrepresented by area “We have met regularly with statre of Ohio and Dayton officials to discuss the business environment and NCR’sx requirements. The decision was not made solely onsingls factors, such as financial incentives. It was based on a very carefu and comprehensive situation analysis of our employment centers usingb independent thirdparty data,” according to NCR.
“The broa range of criteria used for the review of the locationas includedavailable workforce, infrastructure, incentivezs given, the government tax structur e and benefits to NCR future employees and stakeholders.” Company spokespeople would not providw specifics of meetings with governmenrt officials and refused to disclose when theidr analysis began or where Ohio ranker in that analysis. The statemenrt comes after officials from the city of Montgomery County and Ohio gathered on the footstepe of the Old Court House in downtown Dayton Tuesday toslam NCR. Lt. Gov.
Lee Fishef said the NCR standsfor “No opportunith to Communicate or Respond,” and officials joinedf in by telling reporters that all theirf efforts to engage the company during the past two years were Fisher said NCR was one of the firstf companies Ohio Gov. Ted Strickland and he reachedf out to when electefdin 2007. Despite numerous overtures, the firsr time Strickland actually talked to Nuti was on the eve of therelocationn announcement, Fisher said. Nan Whaley, Dayton city accused the company of failinh to convey itstrue intentions. City officials laid out a timetablde they say shows the company was not as responsivs the requests for meetings as it shouldhave been.
According to the city of Dayton: • In Octobe r 2008, Dayton officials requested a meetin g with the highest ranking localNCR officials, but that was deniexd by NCR. • In January 2009, the city triedc to get a meeting, but was unabl to. • In February, county, city and statew officials had a meeting with three compant officialsin Dayton. They were supposed to meet with Chieg Executive OfficerBill Nuti, but he did not show. • On Aprill 20, a meeting with county and city officials took place withNCR officials, whichj was a pre-meeting for another planned April meeting. • NCR canceled the seconcd April meeting and rescheduledfor May. NCR then canceled the May meeting.
Dayton did not provide meetingg dates prior toOctober 2008.
The (NYSE: NCR) when Dayton-areqa and Ohio leaders tried to contact the compan about rumors it wasleaving town, saying NCR oftenm did not return calls or NCR issued a statement stating its side of things and implying its level of interaction with local and state officials was misrepresented by area “We have met regularly with statre of Ohio and Dayton officials to discuss the business environment and NCR’sx requirements. The decision was not made solely onsingls factors, such as financial incentives. It was based on a very carefu and comprehensive situation analysis of our employment centers usingb independent thirdparty data,” according to NCR.
“The broa range of criteria used for the review of the locationas includedavailable workforce, infrastructure, incentivezs given, the government tax structur e and benefits to NCR future employees and stakeholders.” Company spokespeople would not providw specifics of meetings with governmenrt officials and refused to disclose when theidr analysis began or where Ohio ranker in that analysis. The statemenrt comes after officials from the city of Montgomery County and Ohio gathered on the footstepe of the Old Court House in downtown Dayton Tuesday toslam NCR. Lt. Gov.
Lee Fishef said the NCR standsfor “No opportunith to Communicate or Respond,” and officials joinedf in by telling reporters that all theirf efforts to engage the company during the past two years were Fisher said NCR was one of the firstf companies Ohio Gov. Ted Strickland and he reachedf out to when electefdin 2007. Despite numerous overtures, the firsr time Strickland actually talked to Nuti was on the eve of therelocationn announcement, Fisher said. Nan Whaley, Dayton city accused the company of failinh to convey itstrue intentions. City officials laid out a timetablde they say shows the company was not as responsivs the requests for meetings as it shouldhave been.
According to the city of Dayton: • In Octobe r 2008, Dayton officials requested a meetin g with the highest ranking localNCR officials, but that was deniexd by NCR. • In January 2009, the city triedc to get a meeting, but was unabl to. • In February, county, city and statew officials had a meeting with three compant officialsin Dayton. They were supposed to meet with Chieg Executive OfficerBill Nuti, but he did not show. • On Aprill 20, a meeting with county and city officials took place withNCR officials, whichj was a pre-meeting for another planned April meeting. • NCR canceled the seconcd April meeting and rescheduledfor May. NCR then canceled the May meeting.
Dayton did not provide meetingg dates prior toOctober 2008.
Sunday, May 1, 2011
Public Companies: Sound off - The Business Review (Albany):
a-ee85aqa.blogspot.com
Even before the recent public outragw overthe bonuses, many businesses were lookingv at restructuring executive pay, given the In fact, the Virginia-based consulting firm surveyedx large U.S. businesses in March and found that 38 percenty of them are making changes to performance measuresa in their annualincentive plans. Compensation has becomee a publicrelations matter, too. With stock prices generally down and companie scutting jobs, there’s been anger over what’s deemed excessive pay.
We wantecd to know how companies could deal with executive compensatiojn in anew era, and asked several experts at local colleges to weigh in on the Here’s what they had to say: Q: Considerinfg the recent outrage over corporate what can a business do to protect its images when it comes to executive compensation ? Title: F. William Harder professor of business Location: A: The business must base bonus planeson pre-determined formulas tying amounts to readilyt observable and desirable results. In the financialo services industry, “results” should be qualifies by risk.
If a person is paid to originat e a loan or otherr financial productinvolving risk, the bonus shoulcd be paid over time so that a futurs loss will impact the bonus This is easier said than done. Many productes have long lives, and bonuses must be paid promptly afteer results in order to be effectiver motivatorsfor employees. Some suggest that a portion or all of a bonua should be paid incompany stock. Stock, is rarely the best reflection ofan individual’s I think that at least half of any bonux should be deferred, and the deferredd amount should be at risk itself based on the performanc over time of the product in Eric E.
Lewis Title: Professor, schoool of management College: Location: A: Much of the criticism of corporates bonuses arises from the perception that some companies choos e to reward their executiveswith “extra” compensation regardleses of the performance of the operations or business segments for whichy they are responsible. While cash bonuses are given to key employees for a varietuof reasons, a company’s decision to enhance compensation in this fashion can trigger a backlashu from stakeholders of businesses that are struggling with A company can avoid some of this criticism by structurint managers’ bonus compensation as either a direct reward for the recentt performance of the company, or as an incentivre that links the financial rewards of the compensation to the futuree performance of the company.
Some businessee accomplish this by granting options or issuingb shares of stock as part of their executivecompensatioj packages. When properly structured, this form of extr compensation can very effectively aligbn the financial interests ofa company’s managers with the long-ternm interests of its When companies make that connection clear, they tend to suffer fewetr criticisms of their compensation structures. Title: Location: A: The businesse must prove to the public that its executives are wortgh the compensation paidto them.
If the compensation is the worth of their services must be similarly It is the manifest absence of proportion between incomea paid and outcomes produced that attractspublicd attention. What makes that perception especiallhy galling is that in a time of economic contractiobn foreveryone else, highly placed executiveds are perceived as abusing their power of settintg their own salaries to protect their own financial interests.
In the financial sector especially, a system was set up whereby the rewards from an expanding economyh were reaped by the executives who deviser newfinancial “products,” while the risksd of failure from over exuberance turn out to be bornwe by everyone else. The appearance of accountability must be restore d before image and reputationb canbe protected. Title: Professor and Economics Department College: A: It is difficult, under any to justify paying multi-million-dollar salaries and bonuses tocorporatse executives.
In an era of fallintg stock prices, government bailouts and worker layoffs, it is even more In general, any large businessx should follow a few simple principles in determininvgexecutive compensation. 1) The board of directors shouldf be advised by an independent groupl whose members haveno connection, either personal or professional, with the executivd whose pay is being reviewed. 2) Compensation, particularly in regards to bonuses, should be tied to firm Further, performance measures should reflect long-ru n accomplishments, rather than short-term gains or which as we have seen, are oftej fleeting.
3) Increases in executive compensation should reflect both the increasesin non-executivee compensation, as well as the return to 4) Companies should be very open in sharinbg their rationale for determining executive including honest evaluations of firm performance.
Even before the recent public outragw overthe bonuses, many businesses were lookingv at restructuring executive pay, given the In fact, the Virginia-based consulting firm surveyedx large U.S. businesses in March and found that 38 percenty of them are making changes to performance measuresa in their annualincentive plans. Compensation has becomee a publicrelations matter, too. With stock prices generally down and companie scutting jobs, there’s been anger over what’s deemed excessive pay.
We wantecd to know how companies could deal with executive compensatiojn in anew era, and asked several experts at local colleges to weigh in on the Here’s what they had to say: Q: Considerinfg the recent outrage over corporate what can a business do to protect its images when it comes to executive compensation ? Title: F. William Harder professor of business Location: A: The business must base bonus planeson pre-determined formulas tying amounts to readilyt observable and desirable results. In the financialo services industry, “results” should be qualifies by risk.
If a person is paid to originat e a loan or otherr financial productinvolving risk, the bonus shoulcd be paid over time so that a futurs loss will impact the bonus This is easier said than done. Many productes have long lives, and bonuses must be paid promptly afteer results in order to be effectiver motivatorsfor employees. Some suggest that a portion or all of a bonua should be paid incompany stock. Stock, is rarely the best reflection ofan individual’s I think that at least half of any bonux should be deferred, and the deferredd amount should be at risk itself based on the performanc over time of the product in Eric E.
Lewis Title: Professor, schoool of management College: Location: A: Much of the criticism of corporates bonuses arises from the perception that some companies choos e to reward their executiveswith “extra” compensation regardleses of the performance of the operations or business segments for whichy they are responsible. While cash bonuses are given to key employees for a varietuof reasons, a company’s decision to enhance compensation in this fashion can trigger a backlashu from stakeholders of businesses that are struggling with A company can avoid some of this criticism by structurint managers’ bonus compensation as either a direct reward for the recentt performance of the company, or as an incentivre that links the financial rewards of the compensation to the futuree performance of the company.
Some businessee accomplish this by granting options or issuingb shares of stock as part of their executivecompensatioj packages. When properly structured, this form of extr compensation can very effectively aligbn the financial interests ofa company’s managers with the long-ternm interests of its When companies make that connection clear, they tend to suffer fewetr criticisms of their compensation structures. Title: Location: A: The businesse must prove to the public that its executives are wortgh the compensation paidto them.
If the compensation is the worth of their services must be similarly It is the manifest absence of proportion between incomea paid and outcomes produced that attractspublicd attention. What makes that perception especiallhy galling is that in a time of economic contractiobn foreveryone else, highly placed executiveds are perceived as abusing their power of settintg their own salaries to protect their own financial interests.
In the financial sector especially, a system was set up whereby the rewards from an expanding economyh were reaped by the executives who deviser newfinancial “products,” while the risksd of failure from over exuberance turn out to be bornwe by everyone else. The appearance of accountability must be restore d before image and reputationb canbe protected. Title: Professor and Economics Department College: A: It is difficult, under any to justify paying multi-million-dollar salaries and bonuses tocorporatse executives.
In an era of fallintg stock prices, government bailouts and worker layoffs, it is even more In general, any large businessx should follow a few simple principles in determininvgexecutive compensation. 1) The board of directors shouldf be advised by an independent groupl whose members haveno connection, either personal or professional, with the executivd whose pay is being reviewed. 2) Compensation, particularly in regards to bonuses, should be tied to firm Further, performance measures should reflect long-ru n accomplishments, rather than short-term gains or which as we have seen, are oftej fleeting.
3) Increases in executive compensation should reflect both the increasesin non-executivee compensation, as well as the return to 4) Companies should be very open in sharinbg their rationale for determining executive including honest evaluations of firm performance.
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