CEO Trust's CT Chapter recently heard from a panel of experts about technology risks facing our companies today. Event Chair, Joe Tait, CIO of Lydall, Inc. had this to say:
We had a great event last week in CT called “Technology Breaches – Is Your Business at Risk?”. The meeting was well attended and based on the comments (and the news of course) this is the sort of thing that we should probably schedule on an annual basis. We had nice mixture of trustees/guests and a panel consisting of IT Security vendors and two attorneys with different areas of focus. Among the comments were:
· I really enjoyed the evening. The speakers were great, the conversation intriguing and there was plenty of interaction. It helps that the subject is, or should be, at the forefront of everyone's mind.
· Great event - keep them coming!
· The discussion and different viewpoints were enlightening and very interesting.
· The subject matter and interaction was very good. A good subject that we can all relate to.
Americans seemed, at least for now, to have reached their saturation point on direct wealth redistribution. So for those who still feel we have more redistribution to do, they are trying via the tax code. A Democratic congressman has proposed to penalize executive pay if the company “fails [the] test of pay fairness.” Specifically, if a public company fails to raise the average pay of its workers making less than $115,000 by a percentage equal to the overall US growth in productivity plus inflation, the government will eliminate the deductibility of top executive compensation above $1 million. What could go wrong? Read More
CEO Trust speaker Shawn Achor spoke recently about how "Happiness Breeds Happiness" as the opening keynote for the Ultimate Software User Conference. Shawn's research is focused on happiness, its generation, and its use as a competitive advantage. Key elements of Shawn's talk included:
After spending twelve years at Harvard University, Shawn has become one of the world’s leading experts on the connection between happiness and success. His research on happiness made the cover of Harvard Business Review, and his TED talk, "The Happy Secret to Better Work," is one of the most popular of all time. Shawn has worked with over a third of the Fortune 100 companies, and lectured in more than 50 countries. Shawn is the author of New York Times best-selling books The Happiness Advantage.
On Tuesday, November 11, CEO Trust's NYC Chapter was fortunate to share in the insights, experience, creativity, and wisdom of Gary Cohen, most recently global CEO of Timex and a consumer products veteran, and Heather Marasse, Managing Partner of Generative Leadership Group (GLG), a leading innovation consulting firm. Gary and Heather have partnered at Gillette, Playtex, and Timex to help launch dozens of successful innovation programs. Here are some of the highlights:
Our CT Chapter welcomed Rob Henrikson, former chairman of the board, president and CEO of MetLife, Inc., for our Leadership Series event on October 22nd in Darien. After catching up with colleagues over a lively wine & cheese reception, CEO Trustees & invited guests settled in for an informal and engaging talk from Rob, who shared with the group his experiences, anecdotes, and lessons learned from his nearly 40 years with Metlife, the largest life insurer in the U.S. and provider to more than 90 million customers in over 50 countries.
Rob disclosed that his journey with MetLife began in 1972 when, fresh out of law school at Emory, he joined as a life insurance agent in Atlanta. Through the 70s & 80s, he served in roles with increasing responsibility in the company’s pension business in Atlanta, Chicago and New York. Attendees learned about some of Rob’s biggest business challenges and accomplishments over the years and throughout his various senior executive positions with MetLife, including president and COO. Interestingly, Rob is the first MetLife agent in the company’s 142-year history who went on to become CEO, a role he assumed in 2006 and kept until 2011.
Trustees & invited guests came away with an insider's perspective of MetLife from during it's most interesting phase of history.
Just published in Directors & Boards. The summary:
Nucor's classic incentive plan contained three elements:
1) a fixed share of profit growth ...
2) ... without limit
3) annual grant of standard stock options
The company was enormously successful because of this plan. It looks like everything that shareholders care about is imbedded in this plan. Empirical evidence strongly supports these plan elements as being good for shareholders. Yet none of them would pass muster with ISS today. Read More
A fun and entertaining evening of live theater was enjoyed by our CT Chapter at the Westport Country Playhouse on August 20. We had a great member turnout and the evening began with some lively discussion and mingling amongst the members and their guests. That was followed by a very interesting discussion by Michael Ross the Managing Director of the Westport Country Playhouse who educated and entertained the group on the history of the Playhouse and the intricacies of the theater business. Michael was gracious, fun and a wonderful host to our Chapter.
Michael's discussion was followed by a viewing of the play "The Things We Do For Love" in only its second night of production. It was a funny and sometimes tragic depiction of a love triangle that was performed exceptionally well and was very entertaining. I think we all had a good time and it was very nice to share the experience with our spouses and guests. A special thanks to Craig Rebecca Schiavone for arranging this event.
- CEO Trustee & CT Program Chair, Michael Pellegrino
Grit and determination and a long career in consumer solutions have led Gwen to her current role as president of a high-end fashion retail company.* Two retail companies are now courting Gwen for the CEO position she’s been tracking toward for years. While the offers present similar salaries, one offers significant wealth potential through performance-based stock awards.
Can Gwen use these performance options to accumulate the wealth needed for retirement and a second career pursuing her humanitarian ventures?
Performance-based equity awards have continued to gain prominence as company boards seek to align compensation with executive performance. The compensation advisor The Hay Group surveyed 300 companies in the top 500, and found that 51% are incentivizing executives today using performance awards tied to the strategic goals of the firm. While time-based stock option awards have declined, performance options are nonqualified stock options linked to performance. Usually the awards are tied to earnings per share targets or certain stock price conditions. They vest when the metric has been satisfied; thus they are referred to as “performance-earned” options. Once vested, an executive can exercise and sell them right away.
Gwen sought our help in understanding how these performance options work, and whether the performance metrics could reasonably be met in order to benefit from the award. She determined that the offer from the company utilizing performance options was superior and would accelerate her plans to eventually run a nonprofit serving humanitarian goals.
If you are evaluating offers and need help comparing parity, it is important to understand the value of the awards, the terms of the performance target, tax treatment and how the likely outcome compares with other forms of executive compensation.
For more information, please contact us.
* The name, likeness and circumstances in this example are a fictional composite of facts from executives similar to actual SFG Clients.
Mr. Steege is President of SFG Wealth Planning Services, Inc., SFG Investment Advisors, Inc. (SFG), a fee-only financial planning firm. Founded 20 years ago, SFG is dedicated to assisting senior executives and their employees with their complex stock-based compensation and planning challenges