Toll Bros. Shareholders OK CEO Bonus Plan

Among other items approved at Toll Brothers’ annual meeting this week, company shareholders endorsed a controversial pay plan that will award bonuses to the CEO, despite a drooping housing market.

Though the company withheld the number of votes in favor of the plan, a shareholder activist group said executives disclosed at the meeting that it was at least 50 percent, according to the Associated Press.

Robert Toll, the company’s CEO, didn’t receive a bonus last year as a result of the poor market, but under the new bonus plan, he would have received upwards of $6.56 million, according to AP.

Of course, the adoption of the plan has already begun turning heads. The bonus for Toll “pays him simply for existing,” Jennifer O’Dell, deputy director of corporate affairs for the Laborers’ International Union of North America, whose pension funds own at least 200,000 sharehols of Toll Brothers, told AP. “You should pay CEOs for performance.”

The California State Teachers’ Retirement System (CalSTRS) and the New York State Common Retirement Fund have opposed the plan, according to AP, and each owns 355,000 and 488,200 shares, respectively (less than a .3-percent stake each).

The new plan – which caps the bonus at $25 million a year – expands the criteria under which the CEO could earn a bonus, considering such factors as gross revenue, cash flow, issuance of new debt, acquisition of companies, overhead cost cuts and worker morale.