Wall Street’s executive class has had a rocky time of it over the last several months. Outlandish salaries, bonuses and perks are perfect targets for people looking to vent their frustrations over the bailout economy. For the most part, the anger has been unleashed on the receivers of the largesse, but the curtain is rising on the board members who approved these lavish pay contracts. Heather Landy of the New York Times notes that the public furor over pay and bailouts is helping to make board service a tough sell at a time when so many candidates, particularly sitting C.E.O.’s, already feel more pressure in their day jobs. http://www.nytimes.com/2009/04/05/business/05board.html?_r=1&scp=1&sq=%22board%20of%20directors%22&st=cse
The Winter issue of Board Member Magazine features the caption, “CEO to Boards: We’re Outta Here.” John Greenwald writes that the exodus of so many CEO directors leaves boards with an unexpected need to fill the empty seats and a dearth of other chief executives waiting to step in. http://www.boardmember.com/MagazineArticle_Details.aspx?id=3070
Heidrick and Struggles (Nasdaq: HSII), www.heidrick.com, and Korn Ferry (NYSE:KFY) www.kornferry.com, of Los Angeles are blue chip headhunters with divisions that specialize in board searches and consulting. Though their stocks reflect the dismal job market at large, continued turnover in board rooms should create some opportunity for their services as compared to those firms that fill jobs lower on the totem pole.
On the surface, now would appear that the current market climate would represent a type of perfect storm for The Executive Board (Nasdaq:EXBD), www.exbd.com, of Arlington, VA. But the stock trades at $14.28, up a tad from its low of $12.35 and 75% off its $47.50. The Company operates as a mix between a research library and consultant as it delves into its network of 4,700 client firms, including 80% of the Fortune 500 and 70% of the FT 100, to deliver best practices and continuing education. One can assume that corporations will be very interested to know what their peers are doing in terms of executive compensation.
Salary.com (Nasdaq:SLRY), www.salary.com, of Waltham, MA provides proprietary compensation data that lets clients know what the road looks like so they can take the middle of it. Its CompAnalyst Executive® suite allows customers to Instantly access executive pay and company performance data for the top five executive officers at all U.S. public companies. That sounds like a no brainer and something that any compensation committee should have. The stock trades at $1.75 on light volume. Low/High for 52 weeks is $1.28/$6.56.
As we see with the AIG retention bonus brouhaha, it is not easy to design compensation packages that walk the fine line between incentivizing and overpaying. San Jose-based Callidus software, (Nasdaq:CALD), www.callidussoftware.com, provides performance based compensation analytics to help companies align interests of the C Suite with shareholders.
Insurance broker AON recently released a report which showed that Directors’ and Officers’ insurance for financial service firms (which protects them from personal liability in the event of shareholder lawsuits) increased by 50% in the last quarter of 2008 compared to Q4 2007. http://insurancenewsnet.com/article.asp?a=top_pc&q=0&id=104479 New York-based Navigators Group (Nasdaq:NAVG), www.navg.com, has been adding capacity and talent in this niche since last Fall. If you want to attract the best board members, you better make sure that their assets are protected from all liability claims.