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LOAD-DATE: April 7, 2008
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GRAPHIC: PHOTOS: Robert Santos, top, hopes to teach high school math. Romaine Hall wants to attend Johns Hopkins and be a neurosurgeon. (PHOTOGRAPHS BY OZIER MUHAMMAD/THE NEW YORK TIMES)

The 2008 New York Times scholars: front row, from left, Santy Barrera, Trinel Torian, Thandar Aung, Joenni Abreu, Qingnan Li

second row, Arian Flores, Yelizaveta Piligromova, Diana Shifrina, Tiana Williams, Ying Wang

third row, Robert Santos, Romaine Hall, Leanne Valentin, Ohn Mar, Gabriella Anderson

back row, Stevens Kelly, Aman Eyasu, Ana Rosado, Mya Marshall, Marlen Amaro. (PHOTOGRAPH BY RUBY WASHINGTON/THE NEW YORK TIMES)
PUBLICATION-TYPE: Newspaper

Copyright 2008 The New York Times Company

887 of 1231 DOCUMENTS

The New York Times
April 7, 2008 Monday

Late Edition - Final

Behold a Dark Horse, Bowing to Everyone
BYLINE: By A. O. SCOTT
SECTION: Section E; Column 0; The Arts/Cultural Desk; MOVIE REVIEW 'CAMPAIGN'; Pg. 4
LENGTH: 494 words
''Campaign,'' a fascinating Japanese documentary opening Monday at the Museum of Modern Art, is likely to challenge some very basic American assumptions about democracy. Not about its virtues as a political system necessarily, but more about the kind of person who runs for office. We tend both to reward and to criticize candidates who show outsize ambition, even when seeking low-level offices, and to employ a vocabulary of cliches -- Do you have what it takes? A fire in the belly? -- to describe the passion that drives aspirants to kiss babies and shake hands in pursuit of power.

The main character in ''Campaign,'' in contrast, seems to be running in a 2005 by-election -- for a city council seat in Kawasaki, a city near Tokyo -- because he has nothing better to do. Or rather because the party bosses who engineer his campaign, and control his every action in the course of it, couldn't find anyone better. Since they belong to the ruling Liberal Democrats and expect to hold the seat in any case, they don't necessarily need or want a charismatic firebrand. They have one at the head of the party, in the person of Junichiro Koizumi, who was then prime minister. Kazuhiko Yamauchi, a 40-year-old entrepreneur of sorts with no political experience, seems immature, anxious, deeply confused and eager to please. Hardly a stirring campaigner, he dutifully leaflets outside of subway stations and bows before his masters, who exclude him from meetings and barely allow him to participate in his own rallies.

At first the film, directed and produced by Kazuhiro Soda, seems to be a long inside joke at Mr. Yamauchi's expense. His puppyish enthusiasm and meek obedience make him seem like a fool, the obliging puppet of an efficient and impersonal political machine. (Why the party didn't choose his more poised and polished wife to run is an interesting question, though perhaps one that answers itself.) But as ''Campaign'' winds on toward a rather anticlimactic election day, Yama-san, as the candidate is known, becomes sympathetic as well as pathetic. And Mr. Soda's close observation of the Japanese political process suggests a broader critique of a society deeply committed to rituals of public humiliation.

Which may, come to think of it, describe campaigning in other countries too. Appreciation of this film hardly depends on an intimate knowledge of or interest in Japanese politics; the candidate and his prospective constituents don't manifest much of either. Instead Mr. Soda uses tried-and-true fly-on-the-wall techniques to create a real-life satire. ''Campaign'' may invite a certain skepticism about democracy, but it will surely restore your faith in cinema verite.

CAMPAIGN

Opens on Monday in Manhattan.

Directed and edited by Kazuhiro Soda; in Japanese, with English subtitles; director of photography, Mr. Soda. At the Roy and Niuta Titus Theaters, Museum of Modern Art. Running time: 2 hours. This film is not rated.
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GEOGRAPHIC: NEW YORK, NY, USA (79%); TOKYO, JAPAN (73%) NEW YORK, USA (79%) JAPAN (93%); UNITED STATES (92%)
TITLE: Campaign (Movie)>
LOAD-DATE: June 25, 2008
LANGUAGE: ENGLISH
GRAPHIC: PHOTO: Eager to please in Japan: Kazuhiko Yamauchi, a candidate in the documentary ''Campaign.'' (PHOTOGRAPH BY MUSEUM OF MODERN ART) (pg.E4)
DOCUMENT-TYPE: Review
PUBLICATION-TYPE: Newspaper

Copyright 2008 The New York Times Company

888 of 1231 DOCUMENTS

The New York Times
April 6, 2008 Sunday

Correction Appended

Late Edition - Final
A Brighter Spotlight, Yet the Pay Rises
BYLINE: By CLAUDIA H. DEUTSCH
SECTION: Section BU; Column 0; Money and Business/Financial Desk; EXECUTIVE PAY: A SPECIAL REPORT; Pg. 1
LENGTH: 2741 words
WASN'T 2008 supposed to be the year of shareholder victory on the executive compensation front?

After all, tighter disclosure rules kicked in last year, and -- the theory went -- once companies had to shine a spotlight on their compensation practices, they were bound to make them better. Politicians, never loath to acknowledge the national mood -- particularly in an election year -- held several hearings about excessive pay.

But signs of sweeping change remain few. Once again, many -- perhaps most -- companies filled their proxies with a blizzard of words and numbers that did more to obscure their processes than to illuminate them. And most irksome of all, true links between pay and performance remained scarce.

Shareholders were mad about excessive compensation last year, when the economy was booming. This year, governance experts say, they are livid. ''They are furious about the dichotomy of experiences -- their shares fall, yet C.E.O. pay still rises,'' said Paul Hodgson, a senior research associate at the Corporate Library, a governance research group.

The compensation research firm Equilar recently compiled data about chief executive pay at 200 companies that filed their proxies by March 28 and had revenues of at least $6.5 billion. And the data illustrates Mr. Hodgson's point. It shows that average compensation for chief executives who had held the job at least two years rose 5 percent in 2007, to $11.2 million (If new C.E.O.'s are counted, that number is $11.7 million). Even though performance-based bonuses were down last year, the value and prevalence of discretionary bonuses -- ones not linked to performance -- were up. A result is that C.E.O.'s who have held their jobs for two years received an average total bonus payout of $2.8 million, up 1.1 percent from 2006.

''We're not against pay,'' said Dennis Johnson, a senior portfolio manager who is responsible for corporate governance for Calpers, the California pension fund. ''But we are certainly against pay for failure, or for just showing up.''

Certainly, some of the highest-paid chiefs -- including Lawrence J. Ellison of Oracle, Alan G. Lafley of Procter & Gamble and Lloyd C. Blankfein of Goldman Sachs -- presided over companies that did very well. But in other cases, it was hard to see a connection between high pay and savvy management.

Soaring oil prices, not stellar strategy, brought huge profits to many oil companies last year, yet Ray R. Irani, chief of Occidental Petroleum, saw his compensation rise 21 percent, to $33.6 million making him the sixth-highest-paid executive in the group of 200 in the survey.

Conversely, the aftermath of the subprime mortgage debacle wreaked havoc at Merrill Lynch, causing the ouster of E. Stanley O'Neal last fall. It is too soon to know whether John A. Thain, who now has the top spot, can restore Merrill's former glory. But thanks in large part to a hefty sign-on bonus, he was the highest-paid executive in the survey, with a compensation package that totaled almost $83.8 million.

Then again, the financial services industry traditionally pays well. The heads of four financial companies -- Mr. Thain, Mr. Blankfein, Kenneth I. Chenault of American Express and John J. Mack of Morgan Stanley -- were among the 10 highest-paid chief executives in the survey.

Even when the credit crisis cost financial chiefs their jobs, it did not hurt their paychecks. Mr. O'Neal at Merrill and Charles Prince at Citigroup both walked away with fortunes.

Washington Mutual, meanwhile, decided that write-offs would not count when it calculated performance-based bonuses, a decision that one compensation expert referred to as calculating batting averages without counting strikes.

''Boards are just too willing to change the goal posts in bad times,'' said Scott A. Fenn, managing director of policy for the proxy advisory firm Proxy Governance.

A result, said Charles M. Elson, a corporate governance expert at the University of Delaware, is that ''we're paying executives like successful entrepreneurs, without asking them to take entrepreneurial risks.''

THAT seemed particularly apparent among real estate companies that are coping with a housing downturn. Jeffrey Mezger, the new chief at KB Home, received a discretionary bonus of $6 million even though the company is suffering. Robert Toll, the chief at Toll Brothers, received no bonus in 2007 -- but the company has rewritten the compensation plan so that he will probably get one this year even if home building does not recover.

''Directors have to look at C.E.O. pay in terms of return on investment, just like they judge any other dollar they allocate,'' said Nell Minow, editor and co-founder of the Corporate Library. ''They have to ask, 'What are we getting back for this money?' ''

In many cases, the answer would be ''not much.'' According to Equilar, the chiefs of the 10 largest financial services firms in the survey were awarded a combined total of $320 million last year, even though the firms reported mortgage-related losses that totaled $55 billion and that wiped out more than $200 billion in shareholder value.

Still, even the angriest shareholders acknowledge that some companies are trying to take inequities -- and the mystique -- out of their compensation plans. The chief executives of Morgan Stanley and Bear Stearns did forfeit their bonuses after the subprime mortgage debacle decimated company profits. And Morgan Stanley said it would introduce performance-related stock options.

At the 200 companies that Equilar studied this year, the average value of performance-based bonuses granted to chief executives who had been in their jobs for at least two years was $1.8 million, a drop of 2.5 percent from 2006. Moreover, only 73 percent of the chiefs got performance bonuses, down from 78.6 percent in 2006.

Equilar also said that 14.7 percent of the stock options and shares awarded to executives in the fourth quarter of 2007 had performance-based vesting criteria -- a small percentage, but a big increase from 8.2 percent in the fourth quarter of 2006.

More companies adopted clawback provisions, in which executives are required to return bonuses or stock options that were based on faulty numbers. The Arkansas Best Corporation even established one for outside directors if any ''misconduct'' on their part ever contributed to the need to restate finances. (Wal-Mart Stores adopted a similar clause two years ago.)

And a handful of chief executives and directors led the charge against excessive pay themselves.

Four years ago, when David P. Steiner was promoted to chief of Waste Management, he took what he calls a ''surgical look'' at the compensation system. It rewarded executives, including the chief, for bringing in new customers and orders, even unprofitable ones. ''It sent the wrong message, that we wanted growth for growth's sake,'' he said.

Gradually the board, at Mr. Steiner's prodding, changed the formula. Last year, 75 percent of Mr. Steiner's long-term incentive plan was tied to specific targets for earnings growth and return on invested capital. And for the first time, the plan included a clawback provision, saying he must return any payments if they were based on numbers that had to be restated.

And next year's proxy will reflect even more changes. Mr. Steiner's pay is now linked entirely to achieving those targets. And some perks he used to get -- about $35,000 worth of items like car allowances and country club dues -- are gone, though their value will be added to his base salary or bonus.

RiskMetrics just went public this year, and M. Ethan Berman, its chief executive, insisted on getting it right from the start. Last year, RiskMetrics bought Institutional Shareholder Services, the high-profile proxy watchdog organization, so Mr. Berman knew that, as he put it, ''Ours will be one of the world's most well-read proxies.'' He also buys into the concept, he said, that an excessive pay package can indicate a board that is too beholden to top management.

Thus, his incentive compensation will be based on attaining a mix of financial growth and client and employee retention objectives that are clearly spelled out in the proxy. Mr. Berman said he already owns 10 to 15 percent of the company -- ''more than enough to align my interests with shareholders,'' he said -- so he receives no stock grants or options. And he does not have a severance package. ''I get the same four weeks vacation as any other employee, and if I leave, I'll get the same severance,'' he said.

Some companies that have been castigated for compensation fiascos in the past are emerging in the best light now. In 2007, shareholders howled when they discovered that Robert L. Nardelli's contract as chief of Home Depot enabled him to command a severance package totaling $210 million when he was ousted.

The Home Depot board did not make the same mistake when it wrote the contract for Frank Blake, Mr. Nardelli's successor. ''Frank Blake's package is so tied to performance that it is almost the mirror image of Nardelli's,'' said Ms. Minow of the Corporate Library. ''Home Depot went from the worst pay package imaginable to one that is close to exemplary.''

Still, shareholders say praiseworthy packages remain in the minority. And they have plenty of compensation issues they continue to attack.

A group of investors, led by the American Federation of State, County and Municipal Employees, is asking companies to limit or bar ''gross-ups,'' in which companies pay the taxes the C.E.O.'s incur from their pay packages.

The timing is not surprising. Many shareholders were aghast last year when Angelo R. Mozilo, who earned $100 million at Countrywide Financial in 2006, successfully argued that Countrywide should pay the taxes that were incurred that year when his wife accompanied him to business functions on the corporate jet.

And gross-ups certainly have not disappeared this year. R. Chad Dreier, the chief of Ryland Homes, earned almost $8.2 million last year. Only $1 million of his pay was salary, and a bit over $2 million was bonus. More than $4 million was gross-ups to cover taxes incurred by vesting of restricted stock that was granted in previous years.

The Corporate Library has just released data showing that 20 percent of chief executives received a tax gross-up on part of their income in 2006. The median gross-up amount was just $13,000, but the concept -- that any corporate chief should receive tax assistance on top of multimillion-dollar payouts -- stuck in shareholders' craws.

''We're putting this research out early enough so that shareholders can wave it at directors,'' Mr. Hodgson said.

Shareholders are also concerned about pay packages that can encourage executives to sacrifice the future for a present-day payout. Mr. Hodgson points to Sprint Nextel as a prime example. In a recent filing to the Securities and Exchange Commission, the company said it had redesigned its compensation plans so that incentive pay for progress toward goals would kick in every quarter.

''If you put a carrot in front of a donkey's nose, it simply chases that carrot,'' Mr. Hodgson said. ''Better you add the carrots to the feedbag, but you don't let the donkey eat any of them until it's accomplished what's needed for long-term success.''

And a growing cadre of investors are asking that companies reward only superior performance -- for example, if the company was more profitable than its peers. The United Brotherhood of Carpenters has filed pay-for-superior-performance proposals at 33 companies, including Best Buy, Honeywell International, WellPoint and Northern Trust, according to RiskMetrics records.

Disclosure -- or lack thereof -- remains a huge issue for shareholders.

''We don't want to see boilerplate,'' said Hye-Won Choi, head of governance for TIAA-Cref, which has made compensation the cornerstone of its governance campaign this year. (Last year it was majority voting for directors.) ''We want to see how the compensation plan is integrated into the business plan and strategic goals and how it is tied to the performance of the individual and the company. And we want companies to clearly articulate targets for payout.''

So does the S.E.C. The agency has contacted 350 companies to insist that they specify performance targets and couch their disclosures in understandable English.

It has also revamped its own Web site, to make it the go-to spot for companies seeking guidance on plain-English disclosure.

''It's our aim to break down all the legalese and the jargon, and the dense cover-your-assets boilerplate that reads more like the insurance policy it is than the helpful guide to investors that it's meant to be,'' Christopher Cox, the agency's chairman, said in a speech last year.

But excess, incomprehensible verbiage was not the only problem with disclosure this year. Many companies -- most citing a reluctance to disclose competitive information -- couched the criteria by which they measured performance in the vaguest of terms. According to the Corporate Library, two-thirds of companies listed fuzzy performance targets -- and of those, no more than 30 percent were really competitively sensitive.

''Sure, we understand if you don't want competitors to know that your chief executive's bonus is tied to opening 10 stores in Delaware,'' said John Nestor, director of the S.E.C.'s office of public affairs. ''But you could at least say the bonus is dependent on successfully expanding.''

Shareholders, for the most part, say they accept that companies cannot divulge sensitive information. But they do not accept that stock price appreciation or profit growth goals belong in that category.

''Companies are still failing to disclose the performance hurdles that trigger pay for performance, and that remains a hugely contentious issue for shareholders,'' said Patrick McGurn, special counsel to the RiskMetrics Group, the new name for Institutional Shareholder Services.

Perhaps surprisingly, not all governance experts buy into the idea of forced transparency on targets. Some worry that if shareholders win on this issue, it might be a pyrrhic victory.

''We worry about unintended consequences,'' said Rebecca K. Darr, a senior fellow at the Aspen Institute, which convenes forums at which executives and shareholders discuss governance issues. ''If companies have to say how they measure individual performance, they might simply revert to easily quantifiable numbers like earnings per share, rather than complex long-term goals.''

In fact, some compensation consultants say the S.E.C. disclosure rules went too far. Pearl Meyer, a senior managing director at Steven Hall & Partners, suggests that executives who missed performance targets might still deserve hefty bonuses, if they managed to stem losses even as economic factors beyond their control -- say, soaring oil prices or a housing slowdown -- decimated their industry. But, she said, it would be hard to lay out a cogent formula for that. Thus, she concludes, making directors spell out the details of their compensation plans could force them toward rewarding conventional short-term performance.

OF course, some governance experts are suggesting the quintessentially simple fix: Have directors sit down with shareholders and ask what they really want to know.

''When it comes to disclosure, last year was a dud,'' said Stephen M. Davis, project director at the Millstein Center for Corporate Governance and Performance at Yale. ''So you'd think that, since the proxy statements are supposed to communicate to the investor community, the boards would ask shareholders what should or should not go into them.''

Pfizer, for one, seems to be doing just that. Shareholders were outraged last year when Hank McKinnell, the company's former chief, walked away with nearly $200 million when he was ousted. So last October, the Pfizer directors invited representatives of large shareholder groups to sit down and air any governance issues that troubled them. About a third of the discussion revolved around compensation.

''They billed it as a listening session, but it was interactive and seemed productive,'' said Ms. Choi at TIAA-Cref, who said one of her colleagues attended. But she quickly added: ''Of course, we don't yet know if it will result in any action.''

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