New disclosure rules were supposed to shame companies into tying chief executive pay to performance.
But the New York Times today points out that new regs are not working all that well. From the story:
Once again, many — perhaps most — companies filled their proxies with a blizzard of words and numbers that did more to obscure their processes than to illuminate them. And most irksome of all, true links between pay and performance remained scarce.
Shareholders were mad about excessive compensation last year, when the economy was booming. This year, governance experts say, they are livid.
Banks are the biggest culprit. Though atrocious mortgage lending practices have led to billions in writedowns, some of the highest paid chiefs in the country came from the banking sector. Charles Prince, the deposed CEO of Citigroup, made a fortune by walking away, the Times reported.
And Washington Mutual decided that write-offs would not count when it calculated performance-based bonuses, a decision that one compensation expert referred to as calculating batting averages without counting strikes.
To be fair, the chief executive of Bear Stearns forfeited his bonus because of the subprime mortgage mess. Of course that’s hardly a consolation to the company’s shareholders, who watched in horror as JPMorgan Chase agreed to buy it for pennies on the dollar.
Please — while most of us in the “real world” are lucky if we get a 3-4% raise, these guys who are really doing NOTHING are making a fortune. Just more corruption at it’s finest.
I don’t care who you are — you cannot convince me that ANYONE is worth what they are paying some of these executives.