Management generations are much like family generations - some create wealth, some conserve wealth, some dissipate wealth.
No one minds generous rewards for managements which create wealth, but should the same apply to managements which dissipate wealth?
STMicroelectronics had a golden era between 1987 and 2005 when it created a company with a market cap of $12.5 billion.
In 2005, a new generation of management took over at ST since when the wealth has dissipated to today's market cap of $9.3 billion.
Has management compensation reflected this decline in value? In a declining company, how far should top execs go in feathering their nests? Should compensation be related to performance? Should unprofitability affect compensation packages? Should the need for taxpayer subsidies affect the scale of exec rewards?
All these questions were raised by an SEC filing last week by ST.
In a filing with the US SEC, ST says it has set up a 'complementary' pension scheme for ST CEO Carlo Bozotti and 'other key executives to be selected by the CEO'.
'With respect to such plan, we have set up an independent foundation under Swiss law which manages the plan and to which we make contributions,' says ST in the filing.
ST's contributions to this 'foundation' were $1.7 million last year.
These contributions to the 'complementary' pension plan were in addition to the $5.2 million of payments made in 2013 to the existing ST management pension scheme.
'The aggregate additional amount set aside by us in 2013 to provide pension, retirement or similar benefits for our Executive Committee and our Managing Board as a group is in addition to the amounts allocated to the complementary pension plan described above and is estimated to have been approximately $5.2 million, which includes statutory employer contributions for state run retirement, similar benefit programs and other miscellaneous allowances', states the SEC filing.
Bozotti had total compensation of $3.4 million last year made up of $1.059 million in salary, $1.165 million in bonus and $1.181 million in 'charges and non-cash benefits'.
How the bonus was calculated is curious because ST's 2013 revenues were $8.08 billion compared to 2012 revenues of $8.49 billion and, following a loss of $465 million, ST's net cash position was $741 million at the end of 2013 compared to $1.192 billion at the end of 2012.
In the year Bozotti took over as CEO - 2005 - ST's revenues were $8.88 billion.
Including Bozotti, ST senior management were paid a collective $17.4 million last year.
ST is in line for a Euros 600 million hand-out from the French Nano2017 programme.