"Say on pay" rules that let shareholders vote on executive compensation are a big part of the compensation debate, especially for financial institutions that received taxpayer aid. Recent votes in the U.K. could well be a harbinger for U.S. banks and other public companies that adopt such rules, which regulators are pressing for and in some cases, mandating. Although the votes are advisory only, they still can influence board decisions.
At Tuesday's annual shareholders meeting of Royal Dutch Shell, 59 percent voted against a plan that would award managers bonuses even though the company hadn't met share performance targets set in 2005. At least one large institutional shareholder, U.S.-based Franklin Templeton, called for all members of Royal Dutch Shell's compensation committee to resign.
A similar vote last month by Royal Bank of Scotland shareholders was more overwhelming: 90 percent opposed that company's compensation plan.
Royal Dutch Shell's pay committee bears brunt of anger [Times of London]
Momentum Grows for Executive Pay Rules [Washington Post]
Dimon rails against foreign worker rules [Financial Times]
JPMorgan CEO blasts U.S. hire-American rules for TARP banks as a "complete and utter disgrace," warns trade partners could retailiate by banning their banks from hiring Americans abroad. The rule forced JPMorgan to rescind job offers it had made to "40 or 50" foreign graduates.
Banks Use Life Insurance to Fund Bonuses [WSJ]
After purchasing life policies on hundreds of thousands of workers during the mortgage bubble, banks are now using the proceeds to pay bonuses and other benefits to top executives.
Banks look to cut the fat [CNNMoney]
Further layoffs and asset sales loom, analysts say. Last week JPMorgan Chase ordered its investment bankers to fly coach on short trips and limit tips to waiters and cab drivers.
Obama task force eyes green jobs to boost economy [Reuters]
Lazard man gets shake-up post at Treasury [Financial Times]
Lazard banker Jim Millstein is Treasury's new senior restructuring officer, charged with helping Secretary Geithner work out the government's holdings in troubled banks, structure new investments to backstop the financial system, and maximise returns to taxpayers.