DOW JONES NEWSWIRES
One of the nation's largest unions is calling for 29
financial-services companies to investigate more than $5 billion in
pay given to the firms' five highest-paid executives.
The pension funds of the Service Employees International Union
wants the companies' boards to review whether the compensation was
"tied to derivatives and other questionable instruments that are
now worthless."
The union said in a statement that if the pay - including cash,
equity and options - "are shown to be based on false economic
metrics, they may be subject to clawbacks under U.S. securities
laws." The pension funds also wants incentive pay to be done away
with.
Bonuses at some financial firms are increasingly carrying
clawback provisions that allow for companies to seek their return
if originally reported numbers on which pay was based get revised.
Critics are also contending that basing large portions of
employees' pay to incentives encourages overly risking
behavior.
Among the companies sent letters by Grant & Eisenhofer,
which represents union pension funds in shareholder matters, are
big banks such as JPMorgan Chase & Co. (JPM) and Citigroup Inc.
(C), insurers like MetLife Inc. (MET) and ratings agency Moody's
Corp. (MCO).
The SEIU represents nearly 2 million workers in industries
ranging from health care to janitorial to security.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com
