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How much is good advice worth? At least one St. Louis company paid a director more than $1 million, most of it in stock that has since declined in value.

Other directors collected hundreds of thousands by serving on multiple boards.

For fiscal 2007, David M. Meyer, who serves as non-executive chairman of CPI Corp., got compensation worth $1.4 million from the company, which operates Sears Portrait Studios and other photography businesses. At CPI, he outearned many directors who serve on two or more boards. Meyer also drew $143,679 in pay as a director of Ashworth Inc., a California clothing maker.

Meyer is a co-founder of Knightspoint Partners LLC, a New York-based investment company that led a shareholder ouster of CPI directors in 2004. He served as the company’s interim chief executive until 2005.

Meyer’s pay includes $16,500 in cash and $7,810 in miscellaneous pay in addition to 28,253 shares of restricted stock valued at $1.4 million in the proxy statement. Meyer got a little over half of the shares for his help with an acquisition last year and the rest for unspecified services he provided to the company in 2006.

Meyer’s case illustrates one of the problems with the way companies are reporting pay for directors. They’re required to report the accounting expense of the compensation, not what directors actually received.

Until the restrictions on the shares expire, they’re carried on the company’s ledgers. When the value of the stock declines, its value on the books must be written down.

The stock Meyer received was valued at an average of $48.56 a share in the proxy, but CPI’s stock has fallen recently in value, hitting a low of $12.39 Aug. 21 and trading recently for less than $13 a share.

If the company marks the value of the shares down, it could mean that CPI will report Meyer’s pay as a negative number next year.

That’s exactly what happened at Brown Group.

The company, which had the highest paid director a year ago, this year reported that most of its directors lost money on their service to the company. Big gains in stock values that had been reported on last year’s proxy were reversed when the value of Brown Shoe stock fell from a high of $37.39 in February 2007 to $11.91 on Jan. 8.

Directors who deferred their pay saw the biggest declines. Brown defers pay into "stock units," which correspond in value to the company’s common stock. They’re paid out in cash when a director leaves the board.

Patricia McGinnis, who deferred all of her cash pay, was the area’s highest-earning director for 2006 at $754,358. Brown reported her 2007 pay as a negative $639,858. The company valued her stock-based pay at $699,858 for 2006 but as a negative $699,858 for 2007.

Brown Shoe said McGinnis’ negative stock award reflects a paper loss on deferred compensation from earlier years through 2006. For 2006, the number was positive, reflecting a gain in value through the end of 2006. For 2007, the company marked the value down because of the lower stock price, but it could not reduce the award by more than the amount it increased in 2006 fiscal year. Brown declined to provide further details.

According to Brown’s proxy, the figure the company reported doesn’t reflect the market value of the underlying stock or what McGinnis would receive if she left the board. That would depend on the number of stock units she had accumulated and the stock prices when she leaves.

Peter Lupo, managing director of Pearl Meyer & Partners, a New York-based compensation consulting firm, agrees that the way directors’ stock-based pay is reported can be confusing. If a company provides information about the amount of stock given and its vesting schedule, you can calculate the "consulting value" of the stock. However, assigning a value could be arbitrary if the company doesn’t tell you when the director got it.

This year’s second-highest paid director was Patrick T. Stokes, the former chief executive of Anheuser-Busch Cos. Stokes serves on the boards at A-B, Ameren Corp. and U.S. Bancorp. Altogether, Stokes took in $1.3 million, including $1.07 million from the two companies based here.

Stokes’ biggest paycheck, $927,018, came from his former employer, where he has a post-retirement consulting gig that paid $750,000 last year. A-B provides Stokes with an office and administrative help as well as transportation when he is providing the consulting service. It spent $390,000 on the office and other expenses for Stokes’ consulting arrangement last year.

Stokes’ consulting was due to end next August, but it will come to an early end as a result of Belgian giant InBev’s agreement to buy A-B. The deal is expected to close later this year.

August A. Busch III, also a former A-B chief executive, took home more than $1.1 million in pay for serving as a director of A-B and Emerson here and at AT&T of San Antonio.

Busch III’s $579,649 in pay from the brewery includes $392,168 for personal security and $16,992 in consulting fees. According to company documents, the company provides security at Busch’s home "in recognition of Mr. Busch III’s continued prominence resulting from his years of service to the company."

A-B also provides Busch with an office, administrative help and transportation when he consults for the company. It also pays some bills related to aircraft owned by Busch or companies in which he has an interest. Busch’s consulting and other post-retirement arrangements cost the brewer $635,000 over and above his director pay.

A-B paid another $407,611 to Ginnaire Rental Inc., a company that Busch owns, to lease aircraft for business use.

William P. Stiritz was the next-highest paid director at $818,233, including $610,622 from three St. Louis area companies. Stiritz, the former chief executive of Ralston-Purina Co., once served on more than 10 boards.

Stiritz, 74, has cut his board commitments in half. He now serves at Ralcorp Holdings Inc., Energizer Holdings Inc., Reliance Bancshares Inc., Macy’s and Vail Resorts Inc. Ralcorp and Energizer both were spun off from Ralston under Stiritz’s guidance. Ralcorp owns about 19 percent of Vail Resorts.

Public companies here spent amounts ranging from $93,500 to nearly $4 million on director pay last year.

Anheuser-Busch topped the list, spending $3.96 million on 15 directors, followed by Express Scripts Inc., which spent $2.66 million for 11 directors. Twenty-one boards spent more than $1 million.

Companies pay directors in cash, stock awards, stock options and miscellaneous pay, which can include travel for spouses, consulting fees and things like insurance or home security.

About 46 percent of the $46.6 million St. Louis companies paid directors here last year was cash — a combination of retainers, fees for attending meetings and extra pay for serving as committee chairmen. The pay total is for 339 outside directors occupying 363 board positions; some directors serve on multiple boards.

Another $16 million or 33 percent of pay was stock, and $7.5 million or 16 percent was in stock options. The amounts listed in these categories represented the company’s cost for the stock-based pay, not necessarily what directors will realize if they sell the stock or exercise the options.

Because this is the first year all St. Louis-based companies were required to disclose director pay, it’s almost impossible to determine whether director pay is increasing overall. Eleven companies increased the retainers they pay to directors. RehabCare Group and First Banks Inc., which were among a handful not paying director salaries in prior years, added them this year.

Some companies require directors to take all of their pay in stock or units that rise and fall in value along with the company’s stock. Others encourage it by giving directors a bonus for selecting stock rather than cash pay. Still others divide directors’ pay between stock and cash.

Corporate governance experts say that requiring directors to hold stock aligns their interests with those of other shareholders.

Arch Coal, for example, requires directors to defer $40,000 of their $120,000 retainer into a hypothetical investment in Arch stock, which is paid in cash when a director leaves the board.

Belden Inc. pays a $60,000 cash retainer and also gives directors restricted stock worth $115,000. Similarly, Charter Communications Inc. pays directors $40,000 in cash and gives them restricted stock worth $65,000.

At Emerson, $100,000 of each director’s $150,000 retainer is paid in restricted stock.

Express Scripts gives directors $115,000 in stock at the first meeting and a $200,000 grant every year in addition to a $30,000 cash retainer.

Bill Coleman, chief compensation officer for Salary.com, says he thinks it’s good for directors to hold stock because it aligns their interests with shareholders. However, he thinks directors’ pay should be kept pretty simple, with few benefits, because they should be paid for their knowledge and what they can contribute to the company.

jerristroud@post-dispatch.com | 314-340-8384

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Premier Dalton McGuinty is shuffling his cabinet this afternoon to underscore the importance of attracting business and new investment to battered Ontario, which has shorn more than 200,000 manufacturing and forestry jobs in the past few years.

Sandra Pupatello moves from economic development to a new international trade and investment ministry.

Her old duties will be taken up by Michael Bryant, who moves from aboriginal affairs and remains House leader.

Labour Minister Brad Duguid succeeds Bryant at the always challenging aboriginal affairs ministry.

Duguid will be replaced by Tourism Minister Peter Fonseca.

The new tourism minister will be Monique Smith, whose responsibilities as revenue minister will be taken over by Finance Minister Dwight Duncan.

Lieutenant Governor David Onley will swear in McGuinty’s revamped cabinet at 3:30 p.m.

It’s unusual to have a cabinet shuffle just days before a new legislative session, suggesting the premier is highlighting the urgency of Ontario’s sagging economy.

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The applause hasn’t died down for the new Chevrolet Volt, but General Motors is already planning where the technology for this new electric car can go next.

The Volt, which made its official debut Tuesday, is based on what GM calls the "E-Flex platform." This new type of vehicle uses high-capacity lithium-ion batteries and will be able to go up to 40 miles on a full charge. If a driver wants to go farther, the car’s small gasoline engine will generate more electricity, allowing trips of over 300 miles.

But that technology doesn’t have to stop with the Volt, according to said Tony Posawatz, vehicle line director for the E-Flex program. Different body styles - wagons or small cars, for instance - and versions styled for different brands are under consideration for a future, improved E-Flex use.

"These are some of the alternatives that are being reviewed, even as we speak, relative to the future beyond Volt," Posawatz said in an interview with CNNMoney.com after the Volt’s official unveiling in Detroit Tuesday.

He made it clear, though, that any discussions of E-Flex’s future are preliminary. No decisions have been made, but lots of options are on the table.

It’s not too soon for GM to be thinking about this, either, said Bill Pochiluk of the auto industry consulting firm AutomotiveCompass. Transferring the technology won’t be that hard, he said.

"Some of the systems and modules will be directly transferable to other vehicles," according to Pochiluk. Add to that a much more competitive hybrid electric car market by the time the Volt comes out, he said.

By the summer of 2009, Pochiluk sees Honda and Toyota still dominating the market. But GM will move fast, he predicted, becoming the third biggest hybrid vehicle manufacturer with no one else even close.

As with any other vehicle platform, different body styles could easily be built on top of the Volt’s engineering. In the same way that the Chevy Cobalt car and HHR wagon are basically the same vehicle underneath while looking completely different, GM could easily put different "top hats," as they’re called in the industry, on the E-Flex platform.

That would be an easy first step to extending the E-Flex’s market in different directions, Posawatz said. There are already indications that there could be an appetite.

"It’s grown beyond our wildest imaginations, the degree to which people connected to the idea of the car, the spirit of the car," Posawatz said. "That’s given us a degree of confidence that this could be a family of vehicles in the future."

Creating the Volt meant engineers had to clear the big hurdles the first time out.

But when you build an electric car that doesn’t have to compromise on utility or performance, Posawatz noted, "it’s easier taking it in different directions."

The E-Flex powertrain, which is the car’s engine and electric motor, works well in a mid-size sedan carrying four passengers and cargo, so it has the flexibility to accommodate more or less demand for different vehicles, Posawatz said.

"This has a little bit of bandwidth," Posawatz said. "This can go on a little bit bigger vehicle if necessary." And it can be scaled down to create more economical versions, he said. With a smaller battery pack, a vehicle might not go as far without needing gasoline. But it would also cost a lot less, an appealing proposition to some.

"There are a number of customers out there that maybe a 20-mile [electric-only range] vehicle would work, and they would still use little to no petroleum," said Posawatz.

Forgoing the gasoline engine altogether for a shorter-range car is another possibility, Posawatz said, but it’s one that creates problems.

First of all, it just goes against the whole idea of E-Flex. GM believes there’s less of a market for a limited-use vehicle. Why wouldn’t customers want the option (even if they rarely use it) of driving a car farther than batteries alone will take them?

Pochiluk agreed that all-electric cars just aren’t as attractive from a marketing standpoint. People will always be scared of getting stranded. "I think it’s impossible to go without a range extender when you’ve only got 40 miles," he said.

Another problem is that electric only operation is harder on a vehicle’s battery, according to Posawatz. Repeatedly draining a battery down to near zero, will mean much shorter battery lives, he said.

"We’re only cycling it to a 50% state of charge," with the E-Flex platform, said Posawatz, "so we’re not beating the crap out of the battery."

For an automaker with the scope of General Motors, different branding creates many opportunities for the range-extended E-Flex. There will probably be E-Flex vehicles that aren’t Chevrolets. No doubt, Cadillac, Pontiac, Saturn and other GM dealers would love to get their own plug-in vehicles to sell.

But for now, Posawatz is concentrating on just getting the ball in play. "You always have to do the first car right and well." 

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At 10 p.m. on a Friday last month, it was the usual Mardi Gras at Lumi

Bank of America says it will buy back about $4.5 billion of auction-rate securities as part of a settlement agreement with Massachusetts regulators.

The Charlotte, N.C.-based bank says it continues to cooperate fully with ongoing investigations by the Securities and Exchange Commission and the New York Attorney General’s Office.

Bank of America (BAC, Fortune 500) joins eight other big investment banks that have agreed to buy back a total of more than $50 billion of the securities.

The auction-rate securities market involved investors buying and selling instruments that resembled corporate debt, except the interest rates were reset at regular auctions, some as frequently as once a week. The market for the securities collapsed in February. 

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VIENNA, Austria — The just-ended OPEC meeting was about more than what a barrel of oil can fetch on the open market as the global economic picture dims.

OPEC heavyweight Saudi Arabia gave a nod, at least symbolically, to fellow member states that have grown increasingly uneasy about the rapid decline in crude prices. The Saudis attempted to placate rival Iran, and laid the groundwork for a potential new alliance with Russia, the world’s second-largest oil producer.

But OPEC’s announcement that it would cut output by more than 500,000 barrels by sticking closer to quotas did little to change what most consumers care most about — the cost of filling up a car with gas or heating a home over the winter.

Benchmark oil prices were on a downward course Wednesday, shedding 68 cents to fetch $102.58 a barrel on the New York Mercantile Exchange. Brent crude briefly touched $98.10.

Behind the scenes, the 13-nation energy cartel juggled the conflicting interests of Saudi Arabia and Iran — and brought oil and gas giant Russia closer into the fold by agreeing to sign a cooperation agreement with the Kremlin.

OPEC’s continued ability to present a common front, while extending a hand to Russia, is potentially bad news for major crude consumers including the United States and Europe. There may be even less wiggle room in trying to find the lowest bidder to meet their energy needs at a time when the summer’s record oil prices close to $150 are a still vivid memory.

But it also may have signaled that record oil prices have spoiled the global appetite for crude, at least for the near future.

"The ministers appear genuinely concerned that the bottom is falling out of global demand and that once-depleted stocks are rebounding with a vengeance," said Antoine Halff, an energy analyst with Newedge USA. "Their panic is testament to how soft the market has become. It is likely to grow even softer."

Saudi Arabia’s clout is key for Washington. President George W. Bush visited Riyadh twice this year to push an oil production increase. The Saudis answered by ramping up production by about 500,000 barrels a day.

OPEC’s decision Wednesday to cut output by 520,000 barrels effectively canceled even that relatively modest nod to U.S. requests, leaving some talking about a Saudi defeat and a victory for Iran, which has sought higher oil prices through production cuts.

Not so, said analyst and trader Stephen Schork, who was monitoring the meeting in Vienna.

"I wouldn’t say the Saudis backed down," he said. "I’d say it was a respectful nod to the other members of the group."

In reality, the Saudis are the tail that wags the dog at OPEC, accounting for nearly a third of the group’s production of around 30 million barrels a day. They often get their way at OPEC ministerial meetings, and a strong push by them in Vienna to keep the status quo on output probably would have succeeded.

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Fairfax Financial Holdings Ltd. announced yesterday it has made a $72-million (U.S.) bid for Polish reinsurer Polskie Towarzystwo Reasekuracji Spolka Akcyjna, valued at 66 cents per share.

Fairfax has commitments to tender the offer from shareholders who own about 47 per cent of PTR’s shares.

The transaction is expected to close in the first quarter of 2009.

"We are excited about future prospects for the Central and Eastern European economies in which PTR is active," Fairfax chair and chief executive officer Prem Watsa said in a statement issued from the company’s head office yesterday.

"This investment will increase Fairfax’s exposure to the region and will provide a long-term platform for expansion," Watsa said.

Fairfax is a financial services holding company that, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management.

Fairfax shares closed up 1 cent at $226.51 Canadian yesterday in Toronto.

The Canadian Press

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Smith & Wesson Holding Corp.’s first quarter revenue rose 5 percent on the strength of increased demand for pistols.

The Springfield, Mass., company reported revenue of $78 million for the three months that ended July 31. That’s up from $74.4 million in the year-earlier period.

Pistol sales grew 18.4 percent, as they were snapped up by consumers and law enforcement agencies. Net income in the quarter was $2.3 million, compared with $4.7 million in the year-earlier quarter.

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Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) is raising $10 billion for a global property fund and plans to put $1.5 billion or more of that into China, shrugging off concern about a property market downturn, a banking source said on Wednesday.

The Morgan Stanley Real Estate Fund VII Global, the latest in a series of property investment funds, is expected to begin investing worldwide before the end of this year, said the source, who had direct knowledge of the fund.

It will invest at least 10 billion yuan ($1.46 billion) in China over the next few years, taking a gradual approach while focusing on the largest cities such as Shanghai, where the price for a luxury downtown apartment can exceed $20 million, said the source.

The retail portion of the fund-raising has been completed with a minimum requirement of $1 million for individual investors in Asia.

The institutional portion, which requires at least $10 million for each institutional investor, will be completed soon, the source added.

“It should not be too difficult for Morgan Stanley to raise funds from retail investors in Asia since, as you know, in China alone the number of millionaires has been growing very fast in recent years,” the source said.

“As for the institutional portion, many of them are old friends of Morgan Stanley,” he said, referring to investors in the Wall Street bank’s last six global property funds.

The source declined to be identified because he was not authorized to comment on the fund to the media. Morgan Stanley declined to comment. 

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You can’t walk within shouting distance of the Pepsi Center here without sighting Ben Affleck, Eva Longoria, Stephen Spielberg or Melissa Etheridge.

After Hillary Clinton’s speech Tuesday, reporters lurched after passed canap