It is Proxy time again but, somehow things just look a little different with so many companies now providing shareholders an advisory vote on executive compensation. It just seems like the proxy statement takes up an inordinate amount of space detailing the favorite subject of the executives – their compensation. Perhaps it has always been that way. But, completely absent in the proxy material that passed my way was any indication that executive compensation declined. The proxy materials, with some notable exceptions, seem to suggest that despite very meager share values relative to the highs before the crash, the executives are not suffering along with the shareholders. Total compensation packages for CEO’s in many large companies exceed 8 figures.
Redoing the formulas appears to be an exercise of setting the performance hurdles at a relatively low level to assure optimum bonuses rather than relating “bogies” to the sustained stock performance over the year.
Corporate executives are like many overpaid athletes who earn big paychecks even when turning in mediocre performances. Giving shareholders an advisory vote on pay may sound like a big deal but it will be nothing of benefit to shareholders until the large institutional shareholders band together and rein in excessive compensation and perk packages. But, it is all like the Wall Street salaries. In spite of all the bad press, the salaries and bonuses seem to just keep rising. The individual shareholder is a minor pawn in their game and appears to be treated as if they are lucky to be allowed to play. As corporations grow larger and larger the total executive compensation, as a percentage of overall expense is relatively small and like the ridiculously high audit fees are just accepted by the shareholders and the independent directors charged with looking out for the shareholder interests.


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