Directors Steal from Stockholders to Pay Bad CEOs
"…Pay for performance at too many companies has turned out to be just another pretty lie…stockholders have learned that while their shares may sink, executive pay rarely does."
Remember that tired, old argument that if you don't pay them extraordinarily big bucks, you can't get CEOs who will earn big bucks for investors? Not true. In fact, the opposite may be true.
"At the 25 companies with the most egregious pay-for-nonperformance, chief executive pay averaged $16.7 million in 2005. The stocks at these companies, meanwhile, fell an average 14 percent while their overall net income dropped 25 percent, on average."
Who controls CEO compensation? Boards of Directors—the people who are supposed to be looking out for investors' interests.
"…Institutions [Directors] that let excessive pay continue without a fight are breaching their fiduciary duties."
And we enforce this breach how?
Remember that tired, old argument that if you don't pay them extraordinarily big bucks, you can't get CEOs who will earn big bucks for investors? Not true. In fact, the opposite may be true.
"At the 25 companies with the most egregious pay-for-nonperformance, chief executive pay averaged $16.7 million in 2005. The stocks at these companies, meanwhile, fell an average 14 percent while their overall net income dropped 25 percent, on average."
Who controls CEO compensation? Boards of Directors—the people who are supposed to be looking out for investors' interests.
"…Institutions [Directors] that let excessive pay continue without a fight are breaching their fiduciary duties."
And we enforce this breach how?
