Cooper is the single largest shareholder of Pulse Investments with 208,352,329 shares valued as at Friday May 7th 2010, JA$4.98 per unit valuing his shareholders at slightly over JA$1 billion dollars.

Kingsley Cooper, Executive Chairman of the publicly listed Jamaican model agency, Pulse Investments Limited, it by no means a poor man. Cooper is the single largest shareholder of Pulse Investments with 208,352,329 shares valued as at Friday May 7^th 2010, at JA$4.98 per unit valuing his shareholders at slightly over JA$1 billion dollars. And so, when published reports indicate that he accepted an annual salary of JA$1 to run the company, we have to ask what gives. Some even pondered the question, was the company sinking into troubled waters, or was this instead a savvy business move as the organization responds to shifts in the marketplace.

The revelation was made in the company’s recently published 2009 Annual Report. In the report, Cooper indicated that “Given the reduction in net earnings attributable to members, top management proposed and the Company’s board accepted, voluntary reduction of its remuneration to one dollar for the year,……..”. According to the report, Directors emoluments: Management fees paid to related parties for 2008 was JA$17,323,045.00.

When asked about this unprecedented move, Kingsley Cooper said “Senior Management wanted to offer this support to the company, given the reduction in net earnings this year. Management strongly believes in the Company’s future prospects, and as significant shareholders, expects future rewards as a result of the Company’s continued success. It is this success that Senior Management wanted to help promote by this action.”

Continuing Cooper noted, “The impact of the decision to voluntarily cut remuneration to $1.00 was very positive for the year ended June 2009, as otherwise, there would have been a further reduction of $15- $20m in the Company’s profits. Obviously, it also helped the Company going forward. In the medium to long term, it is unlikely to have a significant impact. This was a decision specific to year ended June 2009. It is unlikely to be repeated.”

But Cooper is by no means the first CEO to make this bold move. He may be the first in Jamaica, but CEO‘s running international companies have been known to make this kind of move, under very special circumstances.

Yahoo Inc. limited co-founder Jerry Yang

Yahoo Inc. limited co-founder Jerry Yang in 2008 took a compensation package of $1 during his final year as chief executive, a tumultuous reign that unraveled after he rebuffed Microsoft Corp.’s $47.5 billion bid to buy the Internet Company. Yang, 40, had settled for the token salary for years because he has gotten rich off of Yahoo’s stock when he started the web site with fellow Stanford University graduate student David Filo in 1994. But like his fellow shareholders, Yang has suffered huge losses on paper as Yahoo shares lost nearly half their value last year. The plunge left Yang’s 3.9 percent stake worth about $600 million less at the end of 2008.

Google CEO Eric E. Schmidt’s

Google CEO Eric E. Schmidt’s compensation package, according to regulatory filings, pulls in a whopping $1 annual salary and a $1,723 holiday bonus. Additionally, Google pays $532,755 for his personal security and $36,795 for his travel expenses.

Apple CEO Steve Jobs

Although the $1 salary trend, shared by the likes of Apple CEO Steve Jobs, DreamWorks’ Jeffrey Katzenberg, Yahoo CEO Terry Semel (starting in 2008), and Google co-founders Sergey Brin and Larry Page, appears altruistic, it has nothing to do with charity. All of the afore-mentioned $1 workers are in fact, billionaires, including Schmidt whose 10.7 million shares of Google stock are worth roughly $5 billion.

The chief executives of the big three United States (US) automakers also offered to give up most of their salary, if they got assistance from the federal government during the recent crisis. Ford CEO Alan Mulally, General Motors CEO Rick Wagoner and Chrysler CEO Robert Nardelli all pledged to earn $1 a year in salary as part of their respective companies’ plans to remain profitable. There was however one major condition for this salary cut – If the government helps them out and if they take that help.

As will be seen from the above international instances, the CEOs in question all took the $1 compensation as their companies were in trouble and they needed to send a clear signal to investors that they were leading the charge to recovery and profitability. The trend to demonstrate to investors that responsible financial management is a dominant paradigm is growing as maintaining investor confidence is critical as organization retool themselves in response to marketplace shifts. Eyebrows are raised these days when CEOs maintain their hefty salaries and generous perks, while the company profits hover on the shores of constant profit loss. So how is Pulse doing?

According to the most recently published 2009 annual report, the Executive Chairman states that “In the financial year ended June 30^th 2009, one marked by an extremely challenging recessionary environment, Pulse was able to increase revenues by 15% from $1.36 billion in 2008 to $1.55 billion. Net income however, fell by 48% from $429 million for the prior year to $223 million. On the earnings side, a reduction in cash sponsorship, due to the world recession, had an impact on net income. Sponsorships are down globally, as companies have moved to cut costs, in the face of recession. More importantly however, on the expense side, a significant increase in advertising costs was mainly responsible for lower profits in 2009.

Kingsley Cooper Executive Chairman and Romae Gordon General Manager and Company Secretary ".....top management proposed and the Company’s board accepted, voluntary reduction of its remuneration to one dollar for the year."

So it would seem that Cooper’s move was quite in order. The 2009 annual report was released ahead of the annual general meeting to be held at the Hilton Hotel, 77 Knutsford Boulevard, Kingston 10 on Thursday, May 27, 2010 at 10 a.m.

Will we see other Jamaican CEO’s follow suit? Your guess is as good as mine.

See also related articles

#2 Kingsley Cooper Executive Chairman – Pulse Investments Limited

http://businessuitemagazine.wordpress.com/2009/10/15/2-kingsley-cooper-executive-chairman-%E2%80%93-pulse-investments-limited/

The Editor, Thanks for naming me one of Jamaica’s top 10 CEO’s for 2008.

http://businessuitemagazine.wordpress.com/2009/12/16/the-editor-thanks-for-naming-me-one-of-jamaica%E2%80%99s-top-10-ceo%E2%80%99s-for-2008/

A CEO to Watch “Kingsley Cooper Keeping the Pulse Alive”

http://businessuitemagazine.wordpress.com/2008/10/08/a-ceo-to-watch-%E2%80%9Ckingsley-cooper-keeping-the-pulse-alive%E2%80%9D/

PULSE Investments “tenuous at best and unsustainable at worst” Michelle Hirst, Research Manager, Stocks & Securities Ltd. (SSL)

http://businessuitemagazine.wordpress.com/2008/12/01/pulse-investments-tenuous-at-best-and-unsustainable-at-worst-michelle-hirst-research-manager-stocks-securities-ltd-ssl/

PULSE BARTERS TO PROFITABILITY Received $1.3b in sponsorship during ’08

http://businessuitemagazine.wordpress.com/2008/11/08/pulse-barters-to-profitability-received-1-3b-in-sponsorship-during-08/