Sick of greedy fat cats? Thankfully there are some bosses that show commendable pay restraint.
I don't know about you, but I'm sick to the back teeth of FTSE bosses lining their pockets at the expense of us hard-pressed shareholders. We all know about Sir Fred Goodwin's pension and all the other undeserved banker bonuses, but none of that's stopping many other fat cats from having a laugh at our expense.
Have they no shame?
Take a look at the PIRC website and you'll find plenty of businesses still lavishing generous payments on directors. AstraZeneca (LSE: AZN), Aviva (LSE: AV), Colt Telecom (LSE: CTM), Logica (LSE: LOG), Pearson (LSE: PSON), Royal Dutch Shell (LSE: RDSB), Segro (LSE: SGRO) and Smith & Nephew (LSE: SN), for instance, have all irritated the corporate watchdog of late with their remuneration reports. Excessive salary improvements, unmerited bonuses, undemanding incentive targets -- the greedy boardroom blighters!
Thankfully there are quoted companies out there that have a more responsible attitude to director pay and shareholder value. Scouring the market for outstanding investment opportunities for Champion Shares, the Fool's share-tipping service, I've come across three small-caps whose bosses have showed commendable pay and bonus restraint.
The first is Games Workshop (LSE: GAW), the table-top wargames business. I admit shareholders here have watched earnings collapse over the years and they no longer receive a dividend. But at least executive chairman Tom Kirby has recognise the difficulties. He's not received a pay increase since 2005, ditched his old bonus plan and joined the ordinary staff scheme. His maximum annual bonus now? Just £1,000.
20% cut
STV (LSE: STVG) has also caught my eye. Investors backing the Scottish television group have endured all sorts of problems during the last decade, resulting in management oustings, rescue rights issues, scrapped dividends and major restructures. However, Rob Woodward, the chief exec drafted in to steer a turnaround, has thankfully acknowledged shareholders' plight and, commendably, will take a 20% pay cut this year and not receive a bonus.
Finally, Andrew Perloff, executive chairman at Panther Securities (LSE: PNS), must be the market's angriest -- and cheapest -- boss. His 2008 annual report refers to "the thieving incompetents who currently are in control of... our economy" and rails against overwhelming taxes and stifling bureaucracy. Anyway, Perloff has not collected a salary or a bonus for two years now, despite his property group -- unlike many others -- maintaining its dividend and avoiding a rights issue.
Not for Fred
I'm not sure whether this trio of small caps will prove to be fantastic investments at their current valuations, but certainly their attitude to board pay merits some further research and a spot perhaps on your watch list. Whatever, I'm positive Sir Fred would hate the remuneration terms at all three. If you know of any other shares that boast worthy pay policies, please let me know in the comment boxes below.
Maynard writes Champion Shares, the Fool's share-tipping service. He always considers director pay before recommending a share. You can test drive Champion Shares for 30 days and pay nothing.
