cendant corp power point

8/11/2019 Cendant Corp Power Point

1/12

CENDANT CORP.

Syndicate 8

Luke Sekar Andari

Rahmi Afida

Sirad Handito

Srifenika Purba

Vynica Septariani

Meeting with Chatolic Fund Corp.


2/12

Purposes of Chatolic Equity Fund

Match theinvestment return ofStandard and Poors

500 list of companies

Refuse to invest in hospital

which allow abortion Everyone will judge by

their treatment

Excessive payment =devalue contribution

It advocateto Chatolic

values


3/12

HENRY SILVERMAN

Lured Investor

1998 Cendant

Corp

Acqusition

Build HFS191

Passion


4/12

Contd

April 1998fraud

accounting

Cendantrestatement

2001 Shift

CendantStrategy

RecoveryProfit

2004revenue

$18.2billion


5/12

Henry Silvermans Compensation


6/12

Contd

If resign from the company :

-

Company paid the base

salary, target bonus

-

Lifetime employee

%83.000/month

-

Pay life insurance and lifetime

medical coverage entire family


7/12

Chatolic Fund has intention for:

US CEO compensation is often excessive

US CEO often temps to undertake self-serving ventures

US CEO degrades long term stock performance

The ratio of avarage CEO pay to avarage worker pay hasskyrocketed

Both Business Week and Forbes gave their worstranking for CEO compansation versus their

performance

In 2002 CEO compensation to be 578 times the pay ofan average US worker


8/12

Challenges Arise

Chatolic fund and Shareholder sued Silverman and the Board ofDirector:

Exorbitant and illegal payment that breached their fiduciary

duties of loyalty, due care, good faith, and candor

The board of director make 4 changes. Its will be expired in 2007.But Chatolic fund and Shareholder still said its excessive

Potential severance payment=2,99 x previous year

compensation His bonus would be conditioned spesific earnings growth

targets

If left Cendant, get 83.000/month till 5 years after resign

His life insurance would be sought


9/12

3 STEP SYSTEM TO IMPROVECOMPENSATION FOR CEO

by Board of Director

Note: Catholic Fund Corp. still said that this payment for CEO still excessive

Restore areasonablerelationshipto avarage-worker pay

Step 1

Only thecompany providethe same type ofcompensation allfulltime workers

Step 2 CEO

compensation tomeeting spesificperformancerequirement

Step 3


10/12

Shareholder urge the Board ofDirectors to:

a. Limit compensation of CEO no more

100 times with avarage worker

b. CEO can get more 100 times amount

if only company achieve more goals

c. Provide grants to CEO only if

company provides equity

compensation to all fulltimeemployee


11/12

Board of Director againtsChatolic Fund proposal

Unattrack

Unmotivated

Unretain

The payment for

CEO must be

evaluated but still

compare tocontribution of the

CEO to company

Equity awards provide

effective incentives to

management

Equity awards provideeffective incentives to

management


12/12

Condt

Finally Chatolic Fund proposal

defeated

Of the approximately 1.02 billion

outstanding shares of Cendant

common stock, about 879 million

shares, or 85,9% were voted

The recomendation to limit Henry

Silvermans pay received only

6,1%of the votes cast.

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