* Novell's payroll appears to be top heavy with execs
CalPERS, the California Public Employees’ Retirement System, is America’s largest pension fund with control over $177 billion-worth of investments. Last week, according to the Sacramento Business Journal (link below), CalPERS called on Novell shareowners to pressure the company to tie its executive compensation to performance.
How powerful is CalPERS? Why should we pay attention to what it’s saying? Again, according to the Sacramento Business Journal story, “The fund was among the first to come out strongly against the excessive amounts paid to Dick Grasso, the former chairman of the New York Stock Exchange. CalPERS also lobbied for Michael Eisner to be removed as chairman of Walt Disney.” Grasso resigned soon after CalPERS questioned his compensation while Eisner has announced that he will soon leave Disney.
Not only does CalPERS have direct influence through the shares it holds (including 1.7 million shares of Novell) but also has indirect influence by commanding a large block of shareholders who also believe that executive remuneration needs to be examined closely.
CalPERS tried at last year’s Novell shareholders meeting to pass a resolution tying executive pay to company performance and garnered 42% of the vote – a fairly high percentage for a proposal not endorsed by the company. This year, the pension fund is asking other shareholders to withhold support for director John W. Poduska, Sr., chair of Novell’s Compensation Committee.
Novell does have some odd compensation plans in place. For example, when Chris Stone “resigned” it was reported that he was the third-highest paid executive. Jack Messman was first, of course, but No.2 was Gerard Van Kemmel, chairman of European operations.
Van Kemmel was named “chairman” last year when former SuSE Linux exec Richard Seibt was named president of European operations. As far as I know, no other operating area has both a chairman and a president. Strangely, Van Kemmel is not listed as part of Novell’s “world wide management team” (https://www.novell.com/company/bios/executive.html, nor is he on the board of directors. So why is he No.2 in compensation?
With the rash of acquisitions and subsequent executive appointments at Novell, it might be that the payroll is top heavy with executives causing the consternation at CalPERS. We’ll watch and see how it plays out, but considering the commotion the pension fund caused at the New York Stock Exchange and at Disney, it could be an interesting shareholders meeting this Thursday, April 14.
