Word: cestello
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...HYATT REGENCY IN Pittsburgh last week, senior managers of the $3.3 billion bank holding company Equimark sat in miserable silence while a shareholder, retired C.P.A. Joseph Cestello, scolded them for their "outrageously generous" compensation, including stock options and hefty retirement pay. Cestello even suggested that the company's board resign "for lack of oversight" and demanded that Equimark, whose losses totaled $148 million in the past two years, adopt policies that would tie pay to performance...
There is nothing unusual about gadflies and dissidents using yearly stockholder gatherings to air their gripes, while executives wait in patient condescension and other shareholders fidget. But Cestello, 74, received a loud round of applause, and his motion received 16% of the votes -- an alarming vote of no-confidence in management by the standards of such gatherings. "I was pleased with the outcome," says the investor. "At least I didn't get laughed off the stage...
...contrary, Cestello had addressed a topic that is no laughing matter these days. Like the managers of Equimark, a growing number of chief executives this spring are feeling compelled to defend their gargantuan paychecks. After a decade of unchecked growth -- during which CEO pay grew four times as fast as the income of the average worker and three times the rate of corporate profits -- executive compensation has become a hot-button issue. From investors, big and small, to public officials at every level, ceos are catching flak as never before...
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