Wells Fargo scores the latest narrow win for CEO pay

Wells Fargo & Co's executive pay plan for 2020 received backing from only about 57% of investor votes on Tuesday, a narrow win for the company and the latest evidence of tougher scrutiny shareholders have put on CEO compensation this year.

CEO and President Charles Scharf was paid $20.4 million in 2020, down from $34.3 million in 2019, when he was first named to lead the bank, according to its proxy statement filed in March. On an annualized basis his total direct compensation in 2020 fell about 12% from $23 million the prior year, according to a January filing. READ MORE

Biden administration to issue executive order to increase minimum wage for federal contractors

The Biden administration is expected to issue an executive order Tuesday that will require all federal contractors to pay their employees working for federal agencies a $15 minimum wage.

Progressives have been trying to enact a $15 minimum wage hike on a national level but fell short of the votes needed last month to include the proposal in the massive $1.9 trillion coronavirus relief bill. Seven Democrats joined Republicans to oppose the measure. READ MORE

The state of compensation in 2021

Due to the financial strain of the coronavirus pandemic, 2020 was a revealing year for many in terms of money, income and personal finance habits. Just in time for Financial Literacy Awareness Month in April, Elements Global Services released its 2021 State of Compensation report. Here are some of the key statistics and takeaways from the report along with insights and predictions about the future from Rick Hammell, the founder and CEO of Elements Global Services. READ MORE

Should tech managers setting compensation fear wage inflation?

Wage inflation across the United States hasn’t been a concern for at least a generation.

During the crushing inflation of the late 1970s, increasing salaries by 10 to 20% year over year would only keep flat an employee’s purchasing power. Today, pay bumps like that are the stuff of a big promotion. That’s because year-over-year price inflation in this country hasn’t crossed even 3% since before The Great Recession. READ MORE

CEO pay remains stratospheric, even at companies battered by pandemic

Boeing had a historically bad 2020. Its 737 Max was grounded for most of the year after two deadly crashes, the pandemic decimated its business, and the company announced plans to lay off 30,000 workers and reported a $12 billion loss. Nonetheless, its CEO, David Calhoun, was rewarded with some $21.1 million in compensation.

Norwegian Cruise Line barely survived the year. With the cruise industry at a standstill, the company lost $4 billion and furloughed 20% of its staff. That didn’t stop Norwegian from more than doubling the pay of Frank Del Rio, its CEO, to $36.4 million. READ MORE

Starting Compensation and Pay Equity in California

As California moves toward a tentative reopening date of June 15, employers may be considering bulking up their workforce again. If hiring new employees, employers should consider the guidance issued by the California Commission on the Status of Women (“Commission”), regarding starting compensation.

The guidance from the Commission first sets forth the applicable California statutes that apply to compensation. READ MORE

The SEC should do more to make startup equity compensation transparent

Imagine that you get a job offer at your dream company. You start to negotiate the contract and everything sounds great except for one detail — your future employer refuses to say in what currency your salary would be paid. It could be U.S. dollars, euros, or perhaps Japanese yen, and you are expected to take a leap of faith and hope for fair pay. It sounds absurd, but this is exactly how the startup equity compensation market currently operates. READ MORE

Developments Regarding Commission-Based Compensation Arrangements with Independent Contractors

A recent Fourth Circuit decision, United States v. Mallory (988 F.3d 730), upheld damages and penalties for more than $100 million for violations of the Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)) (the “AKS”) and the False Claims Act (31 U.S.C. § 3729) by a blood testing laboratory and its contracted sales agents. The Court held that commission payments made by the laboratory to its sales agents (sales companies that, in turn, hired and contracted salespeople to sell the laboratory blood tests), which were based on the percentage of revenue the sales agents generated for the laboratory through marketing services, constituted improper “remuneration” that intended to induce the sales agents to sell as many laboratory tests as possible. The defendants failed to show that the arrangements fit within an AKS Safe Harbor. READ MORE

Joe Manchin Mocked Bernie’s $15 Minimum Wage Bill at Lobbyist Event

When Joe Manchin told attendees at the National Restaurant Association (NRA)’s national conference on Tuesday that the minimum wage shouldn’t be more than $11 and there should still be a subminimum wage for tipped workers, the group’s chief lobbyist couldn’t contain his excitement.

“From your lips to God’s ears,” exclaimed Sean Kennedy, the NRA’s executive vice president of public affairs, who spoke with the Democratic senator from West Virginia as part of a virtual panel titled, “Seeking Unity: Conversations on Finding Bipartisan Solutions.” READ MORE

J&J Shareholders Urged by Others to Reject CEO's $30 Million Payday

Johnson & Johnson Chief Executive Officer Alex Gorsky is up for a whopping $30 million payday. However, several prominent investors are urging shareholders to reject the compensation package because it shields the executive from billions of dollars in opioid-related litigation costs to the company.

J&J is a target in multiple lawsuits over the marketing of its opioid products. Despite those legal concerns and settlements of nearly $5 billion over the past two years, the CEO was up for a pay increase.  READ MORE

Proxy Season: Early Highlights and Emerging Themes

The COVID-19 pandemic, volatile market conditions, and increasing stakeholder attention to a range of environmental and social topics made 2020 a remarkably difficult year for many public companies. 2021 will bring new challenges, as major investors and proxy advisors signal enhanced scrutiny of director nominees and executive compensation programs, as well as more openness to environmental and social shareholder proposals.

As many companies prepare for upcoming annual meetings, we take stock of early proxy season activity, highlighting early results and emerging themes relevant to corporate leaders. READ MORE

CEOs are getting paid bonuses like there was no pandemic

Yum Brands' profits slumped hard last year as the coronavirus pandemic shuttered restaurants around the U.S. That didn't stop the fast-food giant from awarding its CEO a multimillion-dollar bonus.

The company, whose restaurant brands include KFC, Pizza Hut and Taco Bell, disclosed in a recent regulatory filing that CEO David Gibbs had failed to qualify for a hefty payout because of the company's 25% drop in earnings in 2020. Yet Yum's board of directors also said it was "unfair" for the executive to give up his bonus just because of the pandemic's adverse impact on the company's financial results. READ MORE

Andrew Cuomo Earned $225,000 Last Year And Is Highest Paid Governor In American History

With a $225,000 salary, New York Gov. Andrew Cuomo is the country’s highest paid governor. The next highest paid is California Gov. Gavin Newsom, who made $202,000 last year.

In fact, Cuomo was scheduled to make $250,000 in 2021 — with another $25,000 pay increase — completing a three-year $71,000 pay hike (40-percent). However, he opted not to take the extra $25,000. (In 2018, an appointed state panel gave the legislature and governor hefty pay hikes.) READ MORE