Executive Pay Zooming Skyward Again
Executive Pay is Zooming Skyward Again After Pausing a Few Years for the Recession
Sure, the amount was a lot more than most of us could ever hope to make for a mere 12 months' work. But it also was well below the average CEO compensation at
Still, Martin's pay gained uncomfortable attention when a majority of the
Since then, shareholders of more than 20 other companies nationwide have rejected their top managers' pay packages, and more such rebuffs are expected in the months ahead.
Although the "no" votes account for a small fraction of the hundreds of say-on-pay ballots held so far -- and they aren't binding -- investor advocates say this new exercise in corporate democracy, mandated by last summer's financial reform legislation, is already having an effect.
Opponents of fat executive paychecks say they're getting more attention from boards of directors. Some firms took small steps to change their ways before their shareholders voted. Along with other investor-friendly rules in the regulatory pipeline, the referendums are giving corporate watchdogs some hope that the most egregious pay practices can be reined in.
"I think boards have actually gotten the message," said
For now, however, executive pay once again is zooming skyward after pausing for a couple of years for the recession.
The jump followed declines the previous two years in response to the deepest economic downturn in decades. But many of the pay packages in those lean years had an unusually large proportion of equity, or company shares and stock options. As the stock market has recovered -- the
The Golden State's highest-paid CEO was
A year ago, under pressure from angry shareholders, Occidental held an early say-on-pay vote, which management lost. That triggered a series of conversations with Oxy's biggest investors, after which the
No. 2 on the state's CEO pay chart was
There also could be fireworks at
"These pensions are one of the elements of 'stealth compensation' that grew in an environment when these things didn't have to be disclosed," McGurn said, predicting that such massive supplemental pensions would draw increasing attention from shareholder activists.
The battle against extreme pay could gain more momentum next year, when another provision of the Dodd-Frank financial regulatory overhaul is scheduled to kick in. That rule, still being written by regulators, would require every public company to disclose the disparity between how much the firm pays its CEO and how much the average worker makes.
Those numbers, which won't look pretty by any stretch of the imagination, could shame companies into pulling back on executive pay, said
Business groups are lobbying
"When you look at how hard companies are fighting" the disclosure requirement, Rees said, "it tells me that this might be enough to burst the CEO pay bubble."
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Executive Pay Zooming Skyward Again
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