- CIBC, Scotiabank heads take pay cuts; But John Hunkin walks away from CIBC with $25.7-million in options after retiring
- Morgan Stanley names Christianson CEO for China
- Suit shows Oracle CEO urged to cut spending
- Wall Street Trainee Is Tapped by Steelers For Super Bowl Duty
- Emerging market debt loses lustre
- Google profit miss raises question of disclosure
- Billionaire Divorces Of The Century
CIBC, Scotiabank heads take pay cuts; But John Hunkin walks away from CIBC with $25.7-million in options after retiring – Globe and Mail
Former CIBC chief executive officer John Hunkin collected $3.75-million in compensation for the nine months he held the job last year, and walked away with $25.7-million in previously accumulated stock awards, according to a company proxy circular issued yesterday.
Canadian Imperial Bank of Commerce awarded Mr. Hunkin a $750,000 salary, plus $3-million in restricted share awards, even though the bank posted an annual loss in 2005, the result of a record $2.4-billion (U.S.) settlement with Enron Corp. investors during the summer.
In its circular, the bank explained that the share award was part of a retirement agreement with Mr. Hunkin that was adjusted following the legal settlement over Enron. It added that the compensation is subject to CIBC’s stock performance over the next three years, and said it believed the size of the package was "appropriate." He made $9-million (Canadian) in 2004.
Mr. Hunkin, who left the bank in July, after six years at the helm, did not receive a cash bonus, in keeping with the rest of CIBC’s senior management team. His successor, Gerry McCaughey, made $3.1-million in 2005, less than half the $7.5-million he made the year before. As part of a new compensation structure unveiled by the bank, Mr. McCaughey’s bonuses and stock awards for a particular year will not be determined by the board until the end of the following year. CIBC directors will not decide until the end of fiscal 2006 whether to give him any bonus or stock awards for last year.
Over all, incentive compensation at CIBC was down 20 per cent last year because of the weak financial results prompted by the Enron legal troubles.
Brian Shaw, the head of investment banking unit CIBC World Markets Inc., made $4.75-million in total compensation, compared with $8-million the year before, when he collected a $4.9-million bonus. Chief risk officer Steve McGirr collected $3.8-million, compared with $6-million in 2004.
Bank of Nova Scotia, which also released its annual circular yesterday, said CEO Rick Waugh’s total pay package dipped modestly in 2005, mainly because the bank did not exceed its financial targets to the same extent it did in 2004.
Mr. Waugh’s compensation was $8.6-million, or $100,000 less than the prior year. But he did make $11.4-million exercising stock options that were due to expire.
David Wilson, who left Scotiabank at the end of the year to head the Ontario Securities Commission, received $7-million in compensation, including a $6.6-million bonus. A spokesman for the bank said Mr. Wilson’s bonus was increased significantly this year because as an outgoing executive he did not qualify to receive stock options or deferred stock units. Retail banking head Robert Chisholm, who is retiring in April, made $3.2-million, and was also granted 101,156 stock options….
Morgan Stanley names Christianson CEO for China – Reuters
U.S. investment bank Morgan Stanley <MS.N> on Tuesday said Wei Christianson, chairwoman of Citigroup Global Markets in Asia, would return as its new chief executive for China.
The New York-based banking and brokerage firm said Christianson was expected to begin work in May and would be based in Beijing, where she would oversee the firm’s investment banking, research, fixed income and foreign exchange, investment management and private equity activities.
Christianson previously worked at Morgan Stanley from 1998 to 2002 as an executive director and the firm’s chief Beijing representative….
Suit shows Oracle CEO urged to cut spending – USA Today
Software billionaire Larry Ellison, one of the world’s most conspicuous consumers, was advised to go on a crash financial diet four years ago as his spending soared on yachts and mansions.
Larry Ellison, the co-founder and CEO of software company Oracle, owns a five-story yacht that has 82 rooms and 8,000-plus square feet of living space.
It’s unclear whether Ellison, 61, heeded the advice from Philip Simon, his personal financial adviser, which surfaced in newly disclosed public documents in a shareholder lawsuit in San Mateo County.
They show Simon warning that Ellison faced a possible financial crisis in 2002 if he didn’t slash his $1 billion in personal debt, curb hundreds of millions of dollars in spending, and diversify his portfolio by selling some of his Oracle stock.
Simon did not return a call seeking comment Tuesday. The software company Ellison co-founded, Oracle, declined to comment.
Simon cautioned Ellison in a flurry of e-mails, many of them sent to the executive from 2000 to 2002. "I think it’s imperative that we start to budget and plan," Simon warned in one 2002 message….
Wall Street Trainee Is Tapped by Steelers For Super Bowl Duty – Wall Street Journal
Grant Bowman was settling into the rhythm of his new office job, arriving at Lehman Brothers’ midtown Manhattan offices every morning at 6:30, sitting at the global futures desk and studying for his final round of Securities and Exchange Commission exams.
Then, a week ago Monday, his cellphone buzzed with messages from his mother, his agent and the Pittsburgh Steelers. They all wanted to tell him the same thing: Pack your bags for the Super Bowl.
Mr. Bowman, 25 years old, was tapped at the last minute for a slot on the Steelers’ practice squad. At scrimmages this week leading up to the game, he is playing the role of opposing Seattle Seahawks players to help Pittsburgh’s first-stringers get ready. Though he isn’t likely to play in the big game itself, he will earn a Super Bowl ring for himself if the Steelers win Sunday.
For Mr. Bowman, it is a roller-coaster ride that will put him back — at least temporarily — in a career that he had given up after his glory days at the University of Michigan and a failed attempt at making it in the pros with the Steelers.
"I’m still trying to figure out why I’m here. I’d sort of hung [my cleats] up," says Mr. Bowman, a 6-foot-1, 281-pound defensive tackle. He adds that he expects to be back on the trading desk at Lehman Tuesday morning….
Emerging market debt loses lustre – Financial Times
Appetite for emerging market debt showed signs of waning yesterday as investors paused for breath following a recent surge in prices.
One sign of this was the tepid demand that met the sale of euro-denominated bonds by Brazil on Monday. Brazil reduced the issue size from up to €500m to €300m. One person close to the Brazil deal said: "We announced the deal just as the market was opening and it opened weaker than expected."
But the person added that the government achieved one of its strategic goals of making the total nominal amount large enough to be included in the EuroGlobal MTS electronic trading platform, which helps to improve the bond’s liquidity.
Analysts say that another reason for a weakening in the market was uncertainty about the future direction of interest rates in the US. Higher US interest rates could lead investors to divert cash away from emerging market investments. A quarter percentage point increase in US rates was widely expected yesterday, and coincided with Alan Greenspan’s last day as chairman of the US Federal Reserve. "There is a little bit of uncertainty right now because of the transition to [Ben Bernanke]," said one market observer. "It does make people slow down."
Indeed, emerging market bonds have enjoyed a sharp rally recently. This month alone, the risk spread, as measured by JPMorgan’s EMBIG index, has tightened from 237 basis points to 210bp over US Treasuries….
Google profit miss raises question of disclosure – The Age, Australia
What did Google know, when did it know it, and should its executives have said anything about it in the first place?
Google blamed a higher-than-expected tax rate for its earnings miss on Tuesday, which shaved $US15.3 billion from the leading Web search company’s market value.
In the age of Sarbanes-Oxley, which aims to get more and better information to investors quickly, unexpected earnings misses create a dilemma for companies: If they know revenue or profit is going to come up short, are they obligated to disclose it in the course of a quarter?
"The senior management team should disclose that to the board," said Craig Dunn, executive director of the Corporate Governance Institute at San Diego State University, when asked about the Google quarterly results. "The board, then, I think has a duty to report that to investors, whom they represent."
Google said on a conference call to discuss its results that the higher tax rate stemmed from strong results in the United States and somewhat weaker growth in Europe, particularly in Britain.
Its overall fourth-quarter tax rate was 41.8 pe rcent and taxes paid on European profits are at far lower rates than in the United States. Google had forecast a tax rate of about 30 per cent for all of 2005; the actual rate ended up at 31.6 per cent, skewed higher by the fourth quarter.
Of course, that Google didn’t say anything earlier about the tax rate shouldn’t surprise many. Since going public, in August 2004 at $US85 per share, the Mountain View, California-based company has held to a practice of not issuing any revenue or profit forecasts whatsoever.
At least one analyst said the 12 per cent drop in Google stock in extended trade sparked by the earnings miss might prompt the company to revisit the forecast issue.
"This may prove that their policy barring preannouncement and giving earnings guidance may not be the wisest policy," said Robert Willens, accounting analyst at Lehman Brothers. "It’s not as if providing guidance is a sign of poor governance."
That said, companies are under no obligation to preannounce anything and are only barred from disclosing material to select audiences, such as at an investor conference, Willens said….
Billionaire Divorces Of The Century – Forbes
Corporate raider Ronald Perelman became rich (estimated net worth: $6 billion) and famous for his corporate deal making, starting with his takeover of Revlon and, more recently, for winning a high-profile suit last year against Morgan Stanley, in which a Florida jury ordered the investment bank to pay Perelman’s firm $1.6 billion (see "Don’t Mess With Me").
But recently his boardroom deals have taken a backseat to his turbulent private life, as Perelman’s marriage to glamorous actress Ellen Barkin (his fourth) heads toward divorce.
Perelman is no stranger to ugly marital endings. His first marriage to heiress Faith Golding lasted 19 years. His second to former gossip-columnist Claudia Cohen lasted nine years….
Perelman is by no means the only billionaire to make headlines for his divorcing ways. Billionaire investor Ronald Burkle (estimated net worth: $2.3 billion) has also been in the news. His ex-wife Janet accused her husband, who controls Pathmark Stores (nasdaq: PTMK – news – people ) and Wild Oats Markets (nasdaq: OATS – news – people ), of hiding assets, when she agreed to a reported $30 million settlement in 1997. According to Ron’s spokesperson, she’s been appealing the settlement unsuccessfully for years. What’s really garnered attention, though, has been a related privacy issue. After his social security number was made public, Burkle successfully sought to seal or redact certain information, citing the threat of identity theft, stalking and kidnapping. Legislation was then passed allowing such information to remain private. Janet Burkle, with support of major media outlets, fought for certain financial information to be made public. Just last week, a state appeals court ruled that the First Amendment provides a right of access to court records in divorce proceedings, and that the recently enacted state law is unconstitutional….
