Few issues outrage shareholders like skyrocketing
executive compensation, and with good reason.
Skyrocketing Executive Compensation
A recent survey of pay for U.S. chief executive officers by
Business Week noted that while average exec pay plunged by
a third, the median pay for our 365 CEOs actually rose by
5.9%, to $3.7 million. Other studies show that CEO pay rose
from 100 times the average worker wage in 1980 to more than
1,000 times the average worker wage in 1995 (FT 9/19/03).
Shareholders can request that a company's Board Compensation
Committee initiate a review of its executive compensation
policies. Write companies in your investing portfolios asking
that they:
Compare the total compensation package of top executives
and a company's lowest paid workers in the United States
in July, 1997 and July, 2007.
Analyze changes in the relative size of the gap between
the two groups and the rationale justifying this trend.
Evaluate whether our top executive compensation packages
(including, but not limited to, options, benefits, perks,
loans and retirement agreements) are excessive and should
be modified.
Explain whether the issues of sizable layoffs or the level
of pay of our lowest paid workers should result in an adjustment
of executive pay to to more reasonable and justifiable levels.