State Street

Annual meeting:  May 20, 2015

Total disclosed compensation for State Street CEO Joseph Hooley increased 19 percent this year from $15,841,234 to $18,842,196 in fiscal year 2014.  The increase in pay far exceeded performance: State Street’s total shareholder return was a dismal 8.7%, trailing the 9.7% of peers by ten percent (of 9.7 percent) and was almost fifty percent below SP 500 TSR of 13.7%. Despite this, Hooley is paid significantly above average for an S&P 500 CEO.

Hooley owns 623,308 shares of stock, most of which were provided as compensation, worth an estimated value of $43 million. This suggests he could adequately plan for retirement, but the company still provides a pension for executives. The value of his pension on 12/31/2014 was $19.5 million and it increased in value by $4.7 million in the past year alone.

Finally, we noted that State Street is a mutual fund manager that invests other people’s money in stocks. Indeed, State Street Corporation put a bunch of other people’s money in its own stock to the extent that it controls 5.21% of the votes on its own State Street stocks. Other mutual fund companies also have large stakes in State Street: T. Rowe Price with 8.73%, Vanguard with 5.08%, and Blackrock with 3.74%. We have already written about the inherent conflict of interest of companies with highly paid CEOs voting on compensation of other CEOs prior to Blackrock’s annual meeting. Mutual fund companies and their executives are complicit and compromised in the system of highly paid CEOs.