I suppose it was worth it for once....
"Regulations make pay data tough to ferret out" by Todd Wallack | Globe Staff, March 10, 2013
Northeast Utilities’ refusal to say how much chief executive Thomas J. May earned for three months of 2012 is just the latest example of how companies often hide or obscure the pay of top executives, taking advantage of loopholes in compensation disclosure rules.
Liberty Mutual relied on a technicality to avoid reporting the $50 million that Edmund F. “Ted” Kelly collected in the year he stepped down as chief executive.
Related: The Land of Liberty
$ure as hell is for $ome.
Many credit unions and mutual banks, including Digital Federal Credit Union and Eastern Bank, won’t say how much their top executives earn, even though they are owned for the benefit of members and the community.
And companies have long buried key details in complicated filings on Friday afternoons or right before holidays, when few people are likely to notice.
We call it Slow Saturday around here because it is a well-known fact that Saturday is the least read and least circulated day regarding news and newspapers. People are out getting errands and chores done before settling in for their weekend. Then they are presented with an agenda-pushing Sunday Globe that was conceived and designed on a Thursday.
You know, sometimes you could almost swear I've been in the room, huh?
Bank of America, for instance, reported key details about the retirement package for outgoing chairman Charles K. “Chad” Gifford on the afternoon before the Christmas holiday weekend in 2004 — including $16.4 million in severance, free use of the corporate jet for 120 hours annually for five years, and the right to buy tickets for up to 15 Red Sox games per year for the rest of his life.
That's back when the good times were a rollin'(?) and no one noticed.
“Companies work hard to bury this stuff,” said Michelle Leder, founder of footnoted.com, an information service dedicated to finding obscure financial information in Securities and Exchange Commission filings and author of the book “Financial Fine Print.” “They don’t make it easy.”
Most publicly traded companies, including Northeast Utilities, are required to report how much they paid their CEO and other top executives in reports for investors and securities regulators. But there remain holes in the disclosure rules, despite growing requirements over the years, including some in the massive Dodd-Frank financial overhaul law.
Critics say Northeast Utilities found one....
Some companies report even less information. Many federal credit unions don’t report any details about how much top executives earn because they are exempt from both SEC requirements covering publicly traded companies and Internal Revenue Service rules governing nonprofits.
Unlike most nonprofits, federal credit unions are not required to file publicly available tax forms, which contain executive pay information. Even federal credit union regulators admitted they typically have no idea how much credit union executives earn.
Marlborough-based Digital Federal Credit Union is one of the largest credit unions in the country. But it won’t say how much chief executive James Regan earned last year.
“We are not required to disclose this information,” said credit union spokesman John LaHair. “Therefore, for the personal privacy of our employees and their families, we do not.”
Similarly, mutual banks, which are mutually owned for the benefit of their customers and the community, typically do not reveal how much their top executives make — even to their customers. Boston-based Eastern Bank, the country’s largest mutually owned bank, said only its board of directors and bank regulators know how much chief executive Richard E. Holbrook earns.
“We do what we are required to do,” Eastern Bank spokesman Andrew Ravens said. “If we ever need to make that information public, we will.”
Many mutual insurers have tried to keep the information confidential as well — even from the policyholders who theoretically own the company — although they are generally required to file at least some information with state regulators....
But even when the information is publicly reported, it’s not always easy to spot.
Leder, who runs footnoted.com, said so many companies file embarrassing information just before the weekend that she has a category on her blog titled “Friday Night Dump.”
:-)
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Vineeta Anand, who tracks pay for the AFL-CIO labor union, said it is often particularly difficult to calculate how much executives will receive as part of their company pensions and other retirement benefits. The information is sometimes spread out in pieces over different documents, tables, and footnotes.
“It’s not all in one place and it’s not easy to understand,” Anand said.
It's that way for a reason.
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Related:
"Northeast Utilities won’t reveal chief’s full pay" by Erin Ailworth | Globe Staff, March 07, 2013
When NStar, one of the state’s biggest utilities, wanted to merge with Northeast Utilities in 2010, the two companies filed thousands of pages of documents with various government agencies detailing their makeup, their financials, and the expected consumer benefits of the consolidation.
But in the months since the deal closed, the combined company has not produced a single page that fully discloses how much compensation its chief executive, Thomas J. May, received in 2012.
Relying on a technicality, Northeast Utilities has refused to detail what May earned during his last three months as the head of NStar before assuming the CEO post at the combined company, including any bonuses or the millions in accelerated stock awards he was expected to get as a result of the merger.
Northeast Utilities said it is not required by the Securities and Exchange Commission to report that compensation, since NStar no longer exists as a separate public company. The result is an unfinished picture of NStar’s final months, including what top executives were paid for engineering a merger that created the 15th largest utility in the nation.
Secretary of State William Galvin, Massachusetts’ top securities regulator, declined to comment on May’s undisclosed pay, as did Attorney General Martha Coakley.
But consumer advocates sharply criticized Northeast Utilities’ failure to fully report the compensation of May and other top executives.
“Whether it’s the letter of the law or not, the bottom line is that shareholders and the public should have information for a whole 12-month period,” said Deirdre Cummings, the legislative director of the Massachusetts Public Interest Research Group.
Added John Howat, a senior analyst at the National Consumer Law Center in Boston: “Some loophole in the rule shouldn’t result in a gap in transparency.”
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The questions about May’s compensation come after both NStar in Massachusetts and Northeast Utilities in Connecticut faced criticism for inadequate responses to major storms in recent years. In addition, the merger has resulted in an undisclosed number of layofffs, despite assurances by the companies that most job losses from the merger would come through attrition.
Northeast Utilities and NStar have come under intense scrutiny since the companies first unveiled plans to merge into a $17.5 billion energy company in October 2010.
It took regulators a year and a half to review the merger, which was ultimately approved with stipulations, including a four-year rate freeze, a $21 million credit to customers, and a guarantee that ratepayers would not foot the bill for executive compensation related to the merger.
Coakley, in a statement Tuesday, reiterated that merger approval protects ratepayers from bearing “the majority of the cost for executive compensation packages.”
Figuring out what May actually earned as a result of NStar’s merger with Northeast Utilities will be difficult, said Fred Whittlesey, who analyzes executive pay through his Seattle-area consulting firm Compensation Venture Group Inc.
“The company is fully complying with SEC requirements,” he said via e-mail, “but their disclosure is murkier than what we see as the current norm.”
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"Coakley presses utility to reveal chief’s pay" by Erin Ailworth | Globe Staff, March 09, 2013
Attorney General Martha Coakley on Friday said she will use her statutory authority to begin the process of compelling Northeast Utilities to release a full accounting of chief executive Thomas J. May’s 2012 compensation.
The public company, which merged with NStar last April, has refused to disclose what May earned in the first three months of 2012, when he was still head of the Boston utility, citing a technicality in the reporting requirements of the Securities and Exchange Commission. Because NStar no longer exists as its own public company, SEC rules say it need not report what May earned during the quarter before the merger closed, including any bonuses or the millions in accelerated stock awards he was expected to get.
Coakley said disclosure of those pay details is necessary to make sure that ratepayers’ money isn’t being used to reward May for the merger....
She said her authority to seek the disclosures comes from the state’s Green Communities Act, a comprehensive energy and environmental law enacted in 2008. Under the law, Coakley, the state’s advocate for ratepayers, has the power to request financial and other information related to rates. If utilities refuse, she can take steps to compel them to comply.
The attorney general’s decision is in contrast to the state Department of Public Utilities, which under state law can compel Northeast Utilities to disclose details of May’s compensation. Instead, officials said they will wait until 2015, when Northeast Utilities is being required to file a report on the merger’s outcome.
“We don’t have any plans to ask for additional information at this time,” said Mary-Leah Assad, a spokeswoman at the state Office of Energy and Environmental Affairs, which oversees the DPU. “Our responsibility is to protect the ratepayers, and we feel we have done that.”
Governor Deval Patrick, who appoints DPU commissioners, said Friday that he will not pressure Northeast Utilities to reveal the missing details about May’s 2012 pay, although he said the SEC should eliminate the technicality that allowed the situation.
After dismissing three questions on the subject with the same answer — “I don’t have an opinion on that” — Patrick made clear he does not consider May’s salary a concern for state regulators.
“Well, I understand there are some federal rules about what he is supposed to do, and whether he is compliant with those rules is up to him and the federal government,” Patrick said before ducking into an elevator Friday....
Everyone leaving Marty out to be martyred, 'eh?
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"In earlier case, DPU had executives’ pay divulged; Northeast head’s salary still secret" by Erin Ailworth | Globe Staff, March 12, 2013
The state Department of Public Utilities, which has balked at demanding disclosure of Northeast Utilities chief executive Thomas J. May’s full 2012 earnings, recently ordered another major utility to completely report the details of its top executives’ salaries, bonuses, and other compensation.
It helps to have connection$.
The DPU order, issued less than four months ago, came after a lengthy review of rates for National Grid. The utility at first didn’t report the salaries of its top executives and then, when Attorney General Martha Coakley sought more information, tried to disclose only total earnings while keeping the names of executives secret.
Regulators determined both names and earnings had to be reported. “Executive salary information is not confidential,” the DPU ruled.
That decision, consumer advocates said, raises the question now of why regulators are not seeking a full accounting of May’s pay, especially since they have questioned the utility on layoffs and other matters related to last year’s merger with Boston’s NStar....
On Monday, the DPU reiterated that its main interest is protecting customers but said again it will wait until 2015 — when Northeast files a report on the merger’s outcome — to review May’s earnings and any merger-related compensation he may have received.
But by 2015, though, when Governor Deval Patrick’s second term is over, it might be too late, Charles Harak, an attorney with the National Consumer Law Center in Boston, said. “It should be out there now,” he said. “In three year’s time, when Tom May has [hypothetically] collected $30 million, it’s going to be hard to claw that back.”
The use of the term is interesting, as you literally have to claw back the loot.
Patrick, who appoints the DPU commissioners, did not respond to requests for comment Monday....
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Also see:
AG wants utility chief’s pay revealed
Coakley presses utility to disclose chief’s pay
NStar chief complies with Coakley’s request for pay details
He "only" made about $4 million for three months "work."
Related: Executive Payday: Pointing Toward the North Star
UPDATES:
Coakley asks SEC for full pay disclosures
