PPG Industries

Meeting Date: April 21, 2016

Total disclosed compensation for PPG CEO Charles E. Bunch for 2015 was $29,998,373, an increase of over 27% over 2014’s $21,628,081. A significant portion of the reported value was the change in pension value of $15.6 million, as compared to last year’s of $7 million.

The company has taken action to address the issue, but it may be too little, too late to appease shareholders. Bunch’s benefit under the Non-Qualified Pension Plan (a plan that ceased to be available for executives hired after January 2006) was frozen effective September 1, 2015. While he will accrue no more benefits the amount already in his account of $44,417,208, will earn a guaranteed interest rate “at 120% of the September 2015 long-term Applicable Federal Rate.” As far as I can ascertain that rate was 2.64% so his guaranteed interest rate would be 3.16%, and Bunch will earn more than $1.4 million in interest per year (without considering the effects of compounding interest).

Last year the generous retirement plan was only one of several red flags the compensation package earned. In addition we noted that PPG’s CEO had among the highest annual incentive in 4 out of five years. This suggests that rather than a bonus for extraordinary accomplishments the incentive has come to be seen as a part of pay the CEO is entitled to. Likewise, the CEO received over half a million in “all other compensation” in 2014. For 2015, Bunch’s non-equity incentive compensation was down slightly to $3.3 million, and “all other compensation” was $651,796. Among the items in “all other compensation” are those that individuals at this level can reasonably be expected to pay for themselves (including financial counseling.)