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Loews Corporation (NYSE:L), a conglomerate with interests in insurance, energy, hospitality, and packaging, has announced a revised compensation structure for its top executives, according to a recent SEC filing. The changes come as part of the leadership transition that saw Benjamin J. Tisch take over as President and CEO on January 1, 2025. The company, currently valued at $17.7 billion, has maintained strong financial health with an overall "GOOD" rating according to InvestingPro metrics, and analysis suggests the stock is currently undervalued relative to its Fair Value.
The Compensation Committee of Loews Corporation established an annual base salary of $1 million for Mr. Tisch, along with a target cash incentive of $2.6 million and a target performance-based restricted stock unit (PRSU) award of 10,690 units, valued at $900,000. These compensation elements are consistent with the company’s 2016 Incentive Compensation Plan and mirror the terms granted to other executive officers. The company has demonstrated strong financial performance, with revenue growth of 10.1% in the last twelve months and a P/E ratio of 13x. InvestingPro subscribers can access additional insights about Loews’s executive compensation trends and financial metrics.
In a significant move, the Committee also approved special stock appreciation rights (SARs) awards for Benjamin J. Tisch, Alexander H. Tisch, Vice President and CEO of subsidiary Loews Hotels & Co, and Jane J. Wang, Senior Vice President and CFO. These awards, not part of the regular annual compensation, are designed to incentivize and retain executives.
The SARs, with a 10-year term, become exercisable after seven years, contingent on the company’s stock price appreciating to certain levels and the executives maintaining their employment, barring certain exceptions like death, disability, or termination without cause. The exercise prices for the SARs are set at $100, $150, and $200 per share, with Benjamin and Alexander Tisch each receiving 100,000 SARs at $100/share, 150,000 SARs at $150/share, and 200,000 SARs at $200/share. Jane Wang received 75,000 SARs at $100/share, 112,500 SARs at $150/share, and 150,000 SARs at $200/share.
The SARs awards’ grant date fair value amounts to $4,093,500 for the Tisch brothers and $3,070,125 for Ms. Wang. Payments for exercised SARs will be made in Loews Corporation’s common stock unless a cash payment is elected by the company.
The Committee believes these awards will motivate the executives to enhance shareholder value. This alignment with shareholder interests comes as Loews maintains its 55-year streak of consecutive dividend payments, demonstrating long-term financial stability. This news is based on a press release statement. For comprehensive analysis of Loews’s financial health and growth potential, InvestingPro offers additional valuable insights, including more than 30 financial metrics and exclusive ProTips.
In other recent news, Loews Corporation reported a decrease in fourth quarter earnings due to higher catastrophe losses and investment losses faced by its insurance subsidiary, CNA Financial. The company’s net income for Q4 2024 was $187 million, a drop from $446 million in the same period the previous year. However, revenue saw an increase, rising to $4.55 billion from $4.26 billion. The results included a previously announced $265 million after-tax pension settlement charge at CNA Financial, without which net income would have been $452 million. On a brighter note, Loews’ Boardwalk Pipelines saw improved results due to increased revenues from re-contracting at higher rates and recently completed growth projects. In addition, Loews repurchased 4.2 million shares of its common stock for $349 million during the quarter. These are some of the recent developments for the company.
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