Risk & Compliance

It Tolls for Thee, Proxy Firm Tells Director

''Withhold'' vote recommended for chairman of Toll Brothers' compensation committee; executive pay said to be ''out of line'' with pay for executiv...
Stephen TaubFebruary 27, 2007

The chairman of the compensation committee at Toll Brothers will be the target of a “withhold” campaign at the homebuilder’s annual meeting, scheduled for March 14.

Advisory firm Proxy Governance is recommending that shareholders withhold their vote from Carl Marbach — one of four directors on the 11-member, staggered board standing for re-election this year — in order to signal concern about the company’s compensation practices.

“While we generally believe that the board is properly discharging its oversight role and adequately policing itself,” Proxy Governance asserted in a report, “it appears that the compensation paid to the company’s executives is out of line relative to that paid to peer executives.”

According to the advisory firm, Toll’s performance trails that of about half the companies in the Standard & Poor’s 1500 and that of a select basket of 10 peer companies. Return on equity is the only metric in which Toll Brothers is near the top of the rankings for these two groups, Proxy Governance stated.

The advisory firm also calculated that over the past three years, the average compensation of chairman and chief executive officer Robert Toll was 564 percent higher than the median for CEOs at 20 peer companies. Last year, Toll earned more than $19 million, which included a $17.5 million bonus, as well as more than $10 million in gains after exercising stock options.

For his part, executive vice president, chief financial officer, and treasurer Joel H. Rassman earned more than $3 million, plus an additional $2.7 from exercising stock options.

On Tuesday, union-backed Amalgamated Bank announced that its LongView Funds would withhold support for Marbach at the annual meeting.

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