{"id":2186,"date":"2010-02-01T20:19:54","date_gmt":"2010-02-02T04:19:54","guid":{"rendered":"http:\/\/hodakvalue.com\/blog\/?p=2186"},"modified":"2010-02-01T20:24:15","modified_gmt":"2010-02-02T04:24:15","slug":"those-sneaky-banks","status":"publish","type":"post","link":"http:\/\/hodakvalue.com\/blog\/those-sneaky-banks\/","title":{"rendered":"Those sneaky banks"},"content":{"rendered":"

The headline is:\u00a0 Bank pay gets boost on the sly<\/a>.<\/p>\n

While the perk angers some shareholders, the reality is that executives at banks and other large companies routinely collect dividends on shares they don’t own.<\/em><\/p><\/blockquote>\n

Let me guess which shareholders:<\/p>\n

\u201cPeople at places like Goldman Sachs are going to reap windfalls in dividends from stocks they haven’t earned yet,\u201d says Tony Daley, an economist at the Communications Workers of America.<\/em><\/p>\n

The union fought similar payouts at General Electric’s 2007 annual meeting after CEO Jeffrey Immelt was paid $1.3 million in dividends\u2014equal to 40% of his salary\u2014on shares he didn’t own. It lost.<\/em><\/p>\n

\u201cIt makes no sense to pay people dividends on shares they don’t own,\u201d Mr. Daley says. \u201cShareholders should be outraged.\u201d<\/em><\/p><\/blockquote>\n

No sense?\u00a0 How about this:\u00a0 if management is awarded beaucoup<\/em> restricted shares, which by definition they can’t collect for a time, their fond hope is for an appreciation of those shares until they vest.\u00a0 And the one lever they most directly control in that appreciation is dividends.\u00a0 Dollar for dollar, the less dividends they pay out, the higher the shares will go.\u00a0 Soooo, if those communications workers prefer dividends, they should push for the holders of restricted stock to get those dividends, too.\u00a0 To eliminate the perverse incentive to chop or hold back on dividends.\u00a0 Which is why boards began awarding dividends on unvested equity, folks.<\/p>\n

That part of the rationale was not mentioned in the article.\u00a0 They didn’t ask me.<\/p>\n","protected":false},"excerpt":{"rendered":"

The headline is:\u00a0 Bank pay gets boost on the sly. While the perk angers some shareholders, the reality is that executives at banks and other large companies routinely collect dividends on shares they don’t own. Let me guess which shareholders: \u201cPeople at places like Goldman Sachs are going to reap windfalls in dividends from stocks […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,10,25],"tags":[],"class_list":["post-2186","post","type-post","status-publish","format-standard","hentry","category-executive-compensation","category-invisible-trade-offs","category-reporting-on-pay"],"_links":{"self":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts\/2186","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/comments?post=2186"}],"version-history":[{"count":4,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts\/2186\/revisions"}],"predecessor-version":[{"id":2189,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts\/2186\/revisions\/2189"}],"wp:attachment":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/media?parent=2186"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/categories?post=2186"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/tags?post=2186"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}