Earlier this month, I commented on an article that described how many board members - of the top banks in the US - were receiving pay increases, while many CEOs, and other c-level executives, saw their salaries decrease. Many people have protested about the large pay packages CEOs receive, and it now has been a hot topic, however, many have not taken notice at the (relatively) huge packages the board members are getting; interestingly, this is not considered their full time job, despite the big money they earn. Most directors only meet a few times a year. Board members at Goldman have just received an additional 500 shares of company stock because of the "increase in demands." How many days did they work? How many times did the board meet? In 2012, the Board met a total of 12 times. What are your thoughts on this? The 500 additional shares comes to about $75,000 a year, in addition to the average compensation of $447,622.
Link: http://dealbook.nytimes.com/2013/04/12/goldman-directors-get-a-pay-raise/
3 comments:
You make a good point, Sean. The board members do receive significant compensation for short hours of work. What I will say though is that the board of directors often make the big decisions within the firm and develop the corporate strategy. So while they are not in the office on a daily basis, they do make big contributions.
Going along with what Chris said, I think that it is important that these board members are given incentive to do their job their very best. If they sit on the board of governors of a powerful company they have, in all likelihood, better places to be and better things to do with their time than govern a company that the next best guy could probably do just as well. The pay gives them additional reason to be there and ensures that the company has the very best people for such an important position.
I understand your comments. I do believe that directors at firms, especially high-power firms like Goldman, should be compensated well; however, I question the level of their pay. I do see why they are getting paid so well: Goldman is doing very well, their numbers keep improving, and people who work on wall street would love to be an employee at Goldman Sachs. Despite all of this, I think it is still quite high, but I am happy to see its in company stock and not straight cash. This points to the company wanting the Board to improve shareholder value and to push the company in the right direction.
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