Wednesday, March 10, 2010

Missed earnings target? Some execs get 'pity' bonus

CNN Money:

NEW YORK (CNNMoney.com) -- Maybe you missed your earnings target last year or your stock was crushed. But if you're a corporate executive, that might not necessarily prohibit you from earning a generous bonus.

Following an unprecedented period of economic turmoil, a number of corporate boards appear to have taken pity on executives last year. In some instances, they handed over millions of dollars in so-called discretionary bonuses to managers.

At United Technologies (UTX, Fortune 500), which manufactures everything from elevators to helicopters, its top six executives collected a combined $4.5 million in bonuses last year, even though the company failed to reach its goal of matching its 2008 profit performance.
Board members at the company defended the move however, maintaining that earnings at peers fell much further, while the company managed to achieve other important milestones, including not cutting its dividend.

"The Committee believes it achieved the appropriate balance in rewarding strong relative performance despite an absolute decline in earnings in 2009," the company wrote in its annual proxy statement.

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