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Pay cut for eBay chief executive

Article By: ,  Financial Analyst
March 11, 2014 9:15 AM

The share price of eBay slipped during trading yesterday (March 10th) following the news that its chief executive received a drop in his total pay for 2013.

It was revealed that John Donahoe was paid $13.8 million (£8.3 million) in 2013, with the figure including salary and bonus. This was down from $29.7 million a year ago.

Mr Donahoe's basic salary was actually up by two per cent last year, but his annual cash incentive was reduced by 43 per cent from a year earlier.

The ecommerce business also announced that it recorded earnings of about $850 million in the final quarter of last year. Even though this was an increase of 13 per cent, its results have not been meeting the expectations of analysts, reports BBC News.

An ongoing dispute with shareholder Carl Icahn is also casting a shadow over the activities of the company at the present time. Mr Icahn has been making recommendations for the future of the firm, but as yet they have been unheeded by the eBay board of directors.

PayPal dispute

Mr Icahn recently called for eBay to spinoff its payment processing company PayPal. The investor, who has bought a 0.8 per cent stake in eBay, claimed the move – which he described as a "no-brainer" – would increase its value as a result.

He is now trying to add two new people to the board of directors at the company, but in a statement released on Monday eBay said that its board "does not endorse any Icahn Group nominee or the Icahn proposal". Shareholders were also told they should vote against the nominees put forward by the billionaire investor.

PayPal was acquired by eBay in 2002 for $1.5 billion and it has been one of the most reliable parts of the ecommerce firm's business plan over the course of the last few years.

Stocks in eBay slipped by 1.42 per cent yesterday on the back of the latest developments with Mr Icahn, perhaps showing the instability at the company is causing doubts for investors over the future direction of the firm.

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