I agree that executive compensation has gotten out of hand. What has this stock done in the last 4 years. It was above $40 a share in January, 1999. How does WB,NB and FBF all do great this quarter and yet what does BBT do? The company has held employees raises to a minumim the last several years averaging 3% or so a year. I guess shareholders are suppose to be satisfied with the same 3% (from the dividend)the employees have received. Check out how much the top executives have had their pay increased in the last three years.From 1999 through 2001 the top six executives received increases over 50% in pay including salary, bonus and other pay. They also received a nice increase last year. This doesn't include stock options and stock grants. Seems like there should be some kind of relationship to shareholder return and executive pay. Good luck to anyone who wants to make a shareholder proposal on this, however be prepared for a fight. They will not go quietly into the night on this issue.
Jim, regarding s/h returns, the 3% you refer to is the yield on current stock price. The annual % increase in the cash dividend you and I receive is up 10.3% this year and has been higher in double digits the past several years...considerably higher increases than inflation or corporate salaries and wages generally. BB&T dividends have treated the owners well in my view.
You are correct on the dividend, but the point I was making is that if you bought the stock in January,1999 and you still own it your overall return is much less than 3%. The dividend has increased over the last 4 years, but the price per share of stock has decreased from over $40 a share to $36.75 today on line at this time. So if one figures their overall return it would be far less than 3% annually and the top six executives haven't suffered with the sharholders.( Who supposely own the company and benefit from the profits.)
I can give you lots of examples of banks that have done better by their dividends. Check out the increase that NB gave this year.
The second question is how many times do you pay the same executives to help get the stock price to where it was previously? Seems to me like these same executives were well paid when the stock price increased to over $40 in 1999. Does this mean that if the price drops again that they will once more be paid to get the price back to $36 a share? It appears that is what is happening.
Hope this clears up the points I was trying to make,
A friend of mine pointed out to me that there IS a relationship between executives pay and the Boards of Directors. Executive pay has nothing to do with stock price or company performance, (it should) but the relationship of the executives to the Boards. Look at the companies that have gone BK while the Boards have bestowed fortunes on the executives. From this discussion it might appears to be, "you scratch my back and I'll scratch yours".???????
My figures are indeed true. You can find all of the figures in the annual reports of BBT. In salary, bonuses and other pay the top six executives pay increased 12% in 1999, 21.2% in 2000 and 10.5% in 2001 these figures are over each previous year. Get your hands on an annual report. In addition they were granted 638,494 stock options at an exercise price of $23.9375 in the year 2000 alone. Get a copy of their annual reports and check out the three years salary, bonus and other pay columns. You might want to go to both the 2001 and 2002 reports to get a really good picture.
The company states that over one-half of the CEO's compensation is based solely on future stock price appreciation and 80% is tied to directly performance results. Share price must not be one of the citeria for this pay or maybe they feel that the shareholders should just keep on paying for getting back to the share prices we have already paid them to achieve in the past.