Marvell chief executive, Sehat Sutardja, is set to receive a pay increase and bonuses just one month after the company announced that it was laying off employees. The executive is on track to make $657,000 this year - up $100,000 from last year along with a stock-based bonus and new option grants good for 415,800 shares. As if this wasn't enough, the troubled company also showed four quarters of net losses, a stock price down 27% last year, and an investigation into stock option backdating. Was this new pay deserved? Maybe shareholders will demand a say next time!

The CFA Institute sent a letter to the SEC last month suggesting changes to the way proxy votes on executive compensation are handled. The letter expressed disappointment in the regulations and suggested several specific changes:

• Ending “the use of endless and complex legal boiler-plate, and the avoidance of full disclosure by inappropriate claims that compensation metrics are proprietary” to improve the quality and clarity of compensation reports.
• Ending a practice that allows companies to avoid the “full disclosure of their [executive’s] use of company assets such as aircraft and homes, or the awarding of other personal services or products to these senior executives through a perquisites “allowance.’ These executives are then permitted to purchase whatever services they wish.”
• “Strictly limit the ability of companies to use ‘competitive considerations’ as a reason to avoid disclosure of compensation strategy”
• Requiring companies to”disclose the names of specific competitors used by the company to create a benchmark for determining executive compensation” and be required to provide “graphic comparisons” of its performance against its peers.

It will be interesting to see if the SEC takes any of these suggestions to heart, but given the organizations 92,000 members it should at least have some impact...

A new analysis of escalating CEO compensation compiled by the Canadian Centre for Policy Alternatives found that the average of the 100 highest-paid Canadian chief executives working for a publicly traded company earned $8,528,000 compared to the average salary of just $38,998 for people who are not CEOs. In fact, Canada's top CEOs now make 218 times as much as the average full-time worker, compared to only 104 times as much 1998. It appears that America isn't the only country with the problem!

"It appears to have had something to do with the fact that the market for chief executive officers became significantly an international market in the 1990s and the salary levels in the U.S. tended to slip over (into Canada)," said one of the report's authors. "All it takes is one or two Canadian companies doing really well after hiring a high-profile American chief executive officer and others start to do it, and that tends to drive up the general level of CEO salaries."

A new study released today by The Conference Board found that CEOs of the nation’s largest companies receive a relatively high proportion of the compensation in the form of stock and options. Many see this as good news since it ties their pay to performance, but others are quick to argue that the stock is often granted to them while the options are often issued deep in-the-money and do not necessarily incentive them as heavily as many would have you believe.

"There is a lot of debate about how making chief executives feel at risk for the stock price will align their interests more closely with those of the shareholders,” the report’s authors wrote. “Under this logic, big multiples are good – it should make the CEO think more like shareholders. This measure would suggest that a significant degree of alignment [of CEO and shareholder goals] should have been achieved already, especially for the largest companies."

Timothy Guertin, president and chief executive of Varian Medical Systems, received compensation valued at $6.2 million in fiscal 2007, according to a proxy statement filed with the SEC. The compensation consisted of $773,098 in base salary combined with cash incentive awards totaling $561,076 for the year. Other compensation included $25,396 in car use and expenses, $14,937 in tax gross-ups, and $1,099 in company paid premiums for life insurance, financial consulting, and medical examinations. The majority of the executive’s salary, however, was realized in stock and option awards with an estimated value of $4.7 million on the days they were granted.

Varian Medical Systems posted net profits of $239.5 million, or $1.83 per share, compared with profits of $245.1 million, of $1.81 per share, in fiscal 2006. The earnings were lowered by the acquisition of ACCEL Instruments and Bio-Imaging Research during the year. During this time, the stock dropped from a 52-week high of $56 in November to a low of $37.30 in September.

Richard Bond, president and chief executive of Tyson Foods, unveiled his compensation for fiscal 2007 today. The executive reported receiving compensation of around $24.6 million, consisting of $1.2 million in base salary, $1.7 million in non-equity incentive plans and the rest in exercised stock, bonuses and stock options. He also reported $740,227 in tax reimbursements and $378,856 in perks, which included use of the company aircraft, a car allowance, country club membership dues, use of company-owned entertainment assets, a personal cell phone, home phone and Internet line and event tickets.

The chief executive of BJ Services (NYSE:BJS), J.W. Stewart, received compensation amounting to $8.2 million for fiscal 2007, according to a proxy statement with the SEC. The compensation consisted of approximately $1.1 million in base salary along with stock and option awards amounting to $6.6 million on the day they were awarded. The executive also received $540,005 in other compensation including $16,965 for financial counseling, $9,074 for club memberships, $20,000 in charitable contributions, and $363,591 in tax gross-ups for stock awards.

Recent surveys have shown that the double-digit raises received by many chief executives in the United States ahead of the credit and subprime crises could spur a whole new set of proxy battles. Research reports by The Corporate Library this week showed total annual compensation for chief executives rising by nearly 13 percent with the highest – 23.6 percent – going to S&P 500 CEOs.

Meanwhile, many investors have been suffering quite substantially from massive write-downs in the asset-backed securities markets. This, coupled with a rise in oil prices, has caused many shareholders to demand that CEO salaries match share price trajectories. Many executives insist that their healthy returns in the past should justify their pay this year, but so-called “say on pay” proposals are still gaining traction in many large companies.

Individual investors can quickly evaluate executive compensation and compare it to stock performance with unique visual graphs via ExecutiveDisclosure.com.