Several chief executives were handsomely paid last year even though their company performed terribly, the Wall Street Journal reports.
By most measures, 2008 was a terrible year for home builder Hovnanian Enterprises Inc. Its stock plunged 62%, revenue fell 31% and the company posted a $1.1 billion loss in the fiscal year ended Oct. 31.
Yet Hovnanian's board awarded Chief Executive Ara Hovnanian a bonus of $1.5 million in cash and stock. The reason: Mr. Hovnanian had helped the company stockpile cash, according to Hovnanian's Feb. 4 proxy statement.
Others that profited include Gary Dickerson, the head of Varian Semiconductor Equipment Associates, which posted an income of $98 million in 2008, a 31% drop, and saw its stock fall 53%. Still, Dickerson walked away with a $1.1 million bonus.
Other companies that paid million-dollar-plus bonuses despite weak results include stock-exchange operator NYSE Euronext Inc. and financial-index firm MSCI Inc. NYSE CEO Duncan Niederauer got a $4 million bonus despite a net loss of $738 million and a stock decline of 69%. MSCI CEO Henry Fernandez received a $3 million annual incentive payment even though the company's share price fell 44% and net income declined 16%.