Friday, March 27, 2009

Manulife's Board redefines the concept of "pay for performance"

You may have read in today’s paper that: “Manulife CEO to get $12.5-million in 2009” or that
“Manulife CEO awarded more than $25M”

That prompted the following question I received from Robert Milmine, who asked:

“Where does one sign up for a job that will pay me $12.5 million for losing $1.9 billion and have that called extraordinary performance?

To which I responded:

The Chair of Manulife’s Board explained this occurred because Dominic’s so called performance bonus was locked in stone before the performance period in question had even elapsed. Their hands were tied, so to speak. Doesn’t that kind of contradict the concept of performance-based? Better fits the definition of “freebie”, “gift”, or perhaps even “ransom” to me?

Not to worry, they only care about this kind of corporate abuse in the US with the bonuses that were paid to AIG executives.


Kephalos said...

Given the "locked in stone" (like Excaliber, eh?)explanation, I wonder about the form of the bonus payment.

If the pay takes the form of stock options, should CRA be concerned that there's been an attempt to convert $12.5 million of taxable income to $6.25 million of 50% non-taxable capital gain?

Eh? Not to forget that bad tax planning sent Connie to the bighouse.

Anonymous said...

You're so right !

I always thought a bonus was not contractual but rather something extra beyond the contact. If it is a performance conract, it must be due after meeting specified goals   anything else is just a form of salary or board of director's sham.


Anonymous said...

$25 million bonus for a 70% decline in Manulife's share price?

The moral bankrupcty of Manulife's Board is mind boggling.


Dr Mike said...

Where do I get a job like that??

What do you mean I can`t.

I have been disqualified because I am an old fart poorly diversified coupon clipping so & so.

Sounds like Dominic to me.

Dr Mike

Anonymous said...

Not to forget Brent that this was the jerk who told Flaherty/Harper to tax Income Trusts for Manulife's Income Plus only to devalue Manulife's shareholders returns, but in turn, to finally reward himself very handsomely.

In my mind, I compare him to Madcow Madoff!!!!!!!!