eBay Cuts CEO's Pay by 53% - Analyst Blog
March 12 2014 - 1:00PM
Zacks
E-Commerce giant eBay
Inc. (EBAY) announced a reduction in Chief Executive
Officer (CEO) John Donahoe’s remuneration for 2013. Donahoe
received $13.8 million (£8.3 million) as compensation package,
which marked a 53% decline from 2012.
The CEO’s total compensation
package includes a base salary of $993,269, a performance-based
bonus of $1.6 million and stock and option awards of about $11.1
million for 2013. Excluding the stock and option awards, Donahoe's
compensation for 2013 fell 30% year over year.
The steep drop in pay comes amid an
ongoing scuffle between the company and activist investor Carl
Icahn (owns about 2% of eBay stock) over its online payments
business, PayPal. The latter had proposed to spin-off PayPal under
a different management and accused two eBay board members of
investing in companies that are direct competitors to eBay.
However, eBay believes that its management team is completely
transparent and PayPal is the company’s best-performing service and
fastest-growing unit.
Icahn nominated two of his
employees — Daniel Ninivaggi and Jonathan Christodoro — to eBay’s
board who were rejected by the company as being unqualified for the
position. The company also requested shareholders to vote against
them in the next annual meeting.
Notably, Donahoe’s package plunged
primarily due to the weaker-than-expected financial results in
2013. Though eBay maintained an average positive surprise of 2.0%
in the trailing four quarters, the company’s 2013 results missed
its expectations. Also, in its analyst day meeting in Mar 2013, the
company lowered its annual sales forecast from $21.5 –$23.5 billion
to $20.5–$21.5 billion for 2015, which indicates persistent
pressure on eBay’s top line due to tough competition.
It goes without saying that major
online retailers, such as Amazon.com (AMZN), are
not going to make things easy for eBay. Additionally,
Google Inc.'s (GOOG) foray in the online
retail/payments segment potentially increases competition for the
company. While eBay’s payments business shows great promise and
innovation, competition is not far behind.
Currently, eBay carries a Zacks
Rank #4 (Sell). Another stock worth considering in the same sector
includes Liberty Ventures (LVNTA), sporting a
Zacks Rank #1 (Strong Buy).
AMAZON.COM INC (AMZN): Free Stock Analysis Report
EBAY INC (EBAY): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis Report
LIBERTY VENTR-A (LVNTA): Get Free Report
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