The $1.3 billion SEIU Master Trust, Washington, demanded that the boards of BlackRock, State Street Corp., Northern Trust and 26 other major financial or credit-rating companies investigate whether a combined $5 billion in their executive compensation was paid on false presumptions and should be recouped.
The SEIU made the demand in letters sent to the companies and warns of potential legal action over the issue, according to an SEIU statement. The letters were sent Friday by Grant & Eisenhofer, a securities litigation law firm representing the trust.
The incentive payments were made to the five highest-paid executives over the last four years, said Allan Ripp, Grant & Eisenhofer spokesman.
The recent collapse of the companies stock prices show that the economic metrics used by the boards in justifying these compensation payments were worthless, and that the companies stock prices were artificially inflated, Stephen Abrecht, executive director of the SEIU Master Trust, said in a statement about the letters.
SEIU and Grant & Eisenhofer declined to make the letters available.
Spokesmen Brian Beades at BlackRock and Carolyn Cichon at State Street could not be reached by press time for comment, and John OConnell at Northern Trust did not respond to a request for comment.