Sallie Mae, which has suffered a series of setbacks during the mortgage crisis, has paid top dollar to recruit a new chief financial office last week. John Remondi will receive an annual salary of $1 million along with stock awards that will deliver $2 million for every $1 increase in the company's share price. The CFO could also earn cash bonuses of up to $3 million, two years of housing in Reston, and $100,000 a year for personal use of corporate aircraft. The salary is higher than any other CFO on record and 150% more than his predecessor in 2006. "He must be in the miracle department," commented on compensation analyst.

Countrywide chief executive, Angelo Mozilo, was encouraged by a top U.S. lawmaker today to donate a portion of its $150 million in recent earnings to nonprofit groups that are trying to help subprime mortgage borrowers that were coerced into loans that they simply could not afford.

The solicitation was made by House Financial Services Chairman Barney Frank, who is also known for spearheading investigations into executive compensation and credit card companies. The chairman also noted that the proposed $4 billion acquisition of Countrywide could be a “positive development” in the subprime mortgage crisis.

John F. Young, new chief executive as TXU Corporation, is set to receive a salary of $1 million and could get annual bonuses of up to $2 million this year, according to a filing with the SEC. The executive is also eligible for bonuses up to twice his salary for hitting board-set performance goals. Young will also receive two and a half times his annual salary and bonus target if he is fired without cause or resigns for good reason during the next two years.

Executive compensation has always been a controversial topic at TXU since it was acquired last year in a private buyout by KKR and others. In 2006, CEO John Wilder received compensation valued at $17.12 million in stock awards and was expected to get at least $277 million worth of stock when he left the company. Who said public company CEOs cost a lot of money? It looks like private equity found a cheaper one in this case...

The Securities and Exchange Commission released a new tool aimed at helping people uncover executive compensation values. Many are excited at the new initiative as it is a step toward transparency; however, many others have uncovered problems with the system that suggest it may need some work before it's ready for public use.

The largest problem with the new application is that it only covers 500 companies and there are no plans to expand that number. This is because the commission currently views it as a "demonstration project" and not an "ongoing effort". Another major problem is that it only provides numbers without any added analysis. Many individual investors may not have any benchmark for comparison between many different executives.

One superior option avaible for free online is ExecutiveDisclosure.com. This service enables investors to not only look up compensation information on most public companies, but also compare compensation with stock performance and peer compensation. ExecutiveDisclosure.com is widely considered to be the best option for analyzing executive compensation - and it's free!

AmEx CEO Ken Chenault has created one of the best models for executive compensation to date after the credit markets killed off a lot of his compan's profits. AmEx's board granted the executive 1,375,000 stock options in November and should receive the same number again on January 31st. This is a huge number of shares was justified by the unusually distant time horizon over the next six years requiring that EPS grow at lesat 15% a year on average, revenues must grow at least 10% a year, ROE must average at least 36% per year, and total return to shareholders must beat the S&P500 by at least 2.5% per year. Now that's a plan that shareholders can back!

Jefferies Inc. projected steep fourth quarter losses as a result of surging compensation costs and two principal trading efforts. Top executives, however, agreed not to receive their bonuses as the bank preparesto take losses estimated at $24 million. The chief executive and chairman of the board also agreed to forego stock grants for last year valued at $13 million and $6.5 million, respectively.

The CEO noted: “We have chosen to do this because we believe it is important to compensate competitively our most important assets, our people, and that, if we are asking our shareholders to make this investment for the long-term success of Jefferies, we should put our money where our mouth is and pay our fair share.”

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...