Archive for the ‘CEO compensation’ Category

My Camera Editorial Advisory Board comment published on June 30, 2007, in response to the Camera’s question: Do CEOs at publicly held companies make too much money?

As the gap in compensations grows between America’s top CEOs and rank-and-file employees, the free market faces possible big trouble unless successful measures are taken. Those within companies making decisions on salaries, stock options and perks for CEOs could maintain or gain credibility with their employees through fair compensation ratios. However, as I see it, this step is nearly impossible for businesses to take alone. One company cannot leave itself open to a weak negotiating position for a quality CEO by lowering its compensation.

While some may look to labor unions for help, I see government regulations as the only option. Government needs to regulate, not control, of course. Otherwise, we’ve lost the free market altogether. Nevertheless, regulations won’t help much unless they include salary caps, a stronger voice for shareholders on compensations, and requirements that CEO compensations be ratified by entire boards, not just compensation committees.

With this widespread problem, the general public has little power to wield except to urge Congress to regulate CEO compensations. If we don’t like what we see, that’s a good place to start.

*This title was not part of the original Camera publication.

Source: Daily Camera

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