Loews
Meeting: May 11
Loews Corporation CEO James Tisch received a total reported compensation of $7,007,024 in 2020, comprised mostly of a NEIC cash award of $3.95 million. The three Tisch brothers (James, Andrew, and Jonathon) that make up the Office of the President “voluntarily agreed to waive receipt of 50% of any annual cash incentive compensation award” as well as a 50% reduction in base salary, resulting in a year over year reduction in total compensation.
However, shareholders may still object to the NEIC given the compensation committee’s choice to use “a qualitative, rather than formula-driven, approach” to determine the amount of incentive compensation for its executives. There is no way for shareholders to ascertain whether what the company said was the initial incentive payout, of twice the paid amounts, was warranted in the first place. The company notes in its proxy statement that incentive payouts were “based on the Committee’s overall judgment of the individual’s performance in the context of our financial performance and seeking to achieve the objectives of our compensation philosophy.” No insight is given as to why the CEO’s bonus is higher than in 2019.
The proxy lists four general factors that the compensation committee “considered,” but also notes that: “These factors were not weighted and there is no formula for how these factors were applied in determining cash incentive compensation awards.”
This is especially questionable given that Loews posted a net loss of $931 million in 2020, compared to a net income of $932 million in 2019.
The median employee to CEO pay ratio at Loews was 74:1, lower than peers particularly in the hospitality industry. It is important to note that Loews Corporation has four consolidated subsidiaries — CNA, Boardwalk Pipelines, Loews Hotels and Altium Packaging – so the median pay at the company overall is $79,344. Last year the median employee was paid less ($72,145), but the company had fewer employees. Last year’s proxy statement reported “approximately 17,300 employees.” This year’s reported “approximately 14,106 employees.” Therefore the over 3,000 people no longer employed by Loews this year must have been paid less.