By Jonathan Weil
Proxy season is winding down, and with it the flurry of news articles about how much dadgum money the country's most overpaid chief executive officers made last year. So before the big wave of annual meetings is done, let's give a nod to another kind of proxy disclosure that doesn't get as much attention: auditor pay.
For the third consecutive year, Bank of America Corp., General Electric Co. and American International Group Inc. all paid their respective independent audit firms more than $100 million for services rendered in 2011. Bank of America paid PricewaterhouseCoopers $119.4 million, including $96.6 million to audit its financial statements. GE paid KPMG LLP $113.2 million, $87.1 million of which was audit fees. AIG paid Pricewaterhouse $110.6 million, including $91.6 million in audit fees. The three companies were the $100 million club's only members for 2011, according to data from the research firm Audit Analytics.
The obvious question that arises: Just how "independent" can an auditor be when it's getting paid more than $100 million a year by the company it's supposed to be watchdogging? AIG, GE and Bank of America all topped $100 million in auditor fees for 2010 and 2009, as well. Amazingly, shareholders don't seem to mind. They keep voting to approve the same auditors year after year.
You get what you pay for, as they say. With this much money at stake, it's hard to believe the accountants checking these companies' books would bite the hands that feed them.
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)
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-0- May/11/2012 14:11 GMT