“Many companies stack the deck in ways that often help their executives get big annual bonuses no matter how the business performs,” say Michael Rapoport and Nicola White for Bloomberg Tax.
Tricks include adjusting (or “double- adjusting”) and boosting the earnings figures used and lowering performance targets, so bonuses are more easily triggered.
“Tinkering is legal, but often it’s poorly disclosed and hard for investors to see”, and corporate-governance advocates in the US are calling for more transparency.
So, despite Warner Bros Discovery’s earnings falling almost 20 percent last year by some measures, the media giant paid its CEO, David Zaslav, $26.4m in performance-related bonuses.
HCA Healthcare “disregarded” results to hand its chief, Sam Hazen, $3.5m. Coca-Cola declared that the pandemic made its pay targets unattainable.
It gave its boss, James Quincey, an extra $1m anyway.
Kris Paterson is a writer for WhatJobs.com.