Too many CEO’s and top level executives in public companies treat the company and shareholder money as their personal “cookie jar”. These people seem to have lost sight of the fact that they are employed by and work for the shareholders. Yet, the shareholders do not appear to have any effective voice in determining the level of their compensation, bonus and benefits packages.
Corporate reporting of total compensation and benefits is not always comprehensive and straight forward. It takes a lot of research to find out exactly what total compensation was received when that total compensation includes salary, bonuses, stock options, health insurance, life insurance, gernerous retirement benefits, excessive termination benefits,country club dues, home security, corporate travel on private jets, limosene services, generous expense accounts, the personal use of corporate event tickets, personal travel on corporate jets, cell phones, blackberries and PDA’s plus other “frills”.
It should be mandatory that corporate reporting include an unambiguous, straight forward listing, in one place, of total compensation for all senior level employees, by line item, that includes the cost of all benefits received.
It is an absolutely ridiculous notion that any corporate executive is worth a salary in excess of $3,000,000 per year let alone generous bonuses and other benefits on top of that. The argument that these levels of compensation are needed to attract the best and the brightest have been demonstrated to have been very foolish arguments born in boom times when almost any manager could have made money. An attempt should be made to identify any top executives who steered their companies in a way that avoided the painful collapse of the year 2008. They would be few and far between. Those executives would have earned their multi-million dollar compensation packages. But, the executives who watched a collapse of stock value during their watch should be absolutely ashamed of their poor performance and should refund the bonuses paid in 2006, 2007 and 2008, since their managem,ent in those years led the companies to the 2008 decline. Taking comfort in the fact that most corporate executives are in the same boat is not a acceptable excuse. As to the compensation level needed to attract top talent, it is suggested that a well publicized executive search at much more modest levels of compensation would identify many more qualified applicants than are eventually submitted to the Boards of Directors for consideration.
The bottom line remains that individual shareholders have ZERO control over the levels of executive compensation and, as a result, greedy corporate executives are getting away with robbing companies blind without any accountability or risk of having to return some of their excessive compensation.
Under current corporate governance the shareholders are not given a vote on executive compensation outside of approving stock option plans and, based on past attempts, it does not appear likely that shareholders will win the right to vote on this subject. But, a concerted effort to notify the corporations of shareholder concerns and displeasure via e-mails addressed to the shareholder relations department might help the cause. Such an effort would be aided by sending e-mails to all friends and acquaintenses urging them to do the same if they too are shareholders.