The Energon Pub

I have some Hasbro stock so I keep an eye on the financial news. My dad also likes to send me articles he finds about various investment topics. Well, he just sent me a really interesting one. A blogger just calculated CEO Brian Goldner's new compensation plan to be worth $35 million over the next five years. I haven't checked that number, but it's probably in the ballpark.

What's completely crazy is that the justification for it is a share price being above certain levels for 30 days in a row--something that has nothing to do with his performance as a manager and that doesn't provide any lasting benefit for shareholders or customers.

http://beta.fool.com/boiseken/2012/10/25/game-over-hasbros-executive-compensation-scheme/14401/

Anyway, here's the SEC filing that discusses the plan. While it might take a while to wrap your head around all the various details, it's about as good a guarantee as any for him to get a big fat bonus. Basically all he has to do is stay at the company for a few more years. And guess where all that money comes from? The pockets of customers like you and me.

http://biz.yahoo.com/e/121011/has8-k.html

Personally, I'd like to see it used for better product development. (you know, like combiners that could actually compete with the third party figures.) Or, if he doesn't want to do that, he could just give it to the shareholders by raising the dividend. But getting a big bonus because the stock price is higher for one month is just downright silly.

As a Shareholder, assuming the US system is similar to the Australian system, you would have voted for that condition.

Hasbro is more than just transformers.

Burn wrote:As a Shareholder, assuming the US system is similar to the Australian system, you would have voted for that condition.

See Warren Buffett's comments on executive pay plans for thoughts on that. But actually, no, shareholders don't get to vote on executive pay. The board of directors does. And usually those guys are friends with the CEO.

amtm wrote:

Burn wrote:As a Shareholder, assuming the US system is similar to the Australian system, you would have voted for that condition.

See Warren Buffett's comments on executive pay plans for thoughts on that. But actually, no, shareholders don't get to vote on executive pay. The board of directors does. And usually those guys are friends with the CEO.

Really? So there is a difference.

I have shares in half a dozen AU companies and prior to the AGM I always receive voting forms, all of which tend to contain a question relating to Directors Remuneration.