Nov

16

There has been no stopping median executive compensation growth as this study shows (+139% from 1995-2005) and similar ramps from the mid 80s into the 90s to present.

I contend that a lot of wealth due shareholders has gone to the professional C-suite with a varied mix of new compensation schemes: large awards of restricted stock bestowing wealth with even modest and industry average relative changes in the shares, options (reset when they became too far out of the money), health insurance, highly remunerative life insurance, bonuses, corporate jet use even for private business, special ad hoc awards for completing deals which ultimately are shown to be dilutive, created little value but built the empire bigger. Many of these 1 ft hurdles are created by weak boards with annual goals not tied to known shareholder friendly strategies. And even when they fail they win if we take Bob Nardelli as one ignominious example. I'm not saying true value creators shouldn't be paid as well as the market will bear but let's just use real benchmarks and real implications for failure like the rest of society has to endure.

By the time protestations by TIAA-CREF and the like come into play, the stock has been driven into the ground. Perhaps the line "where are the customers' yachts" s/b changed to "where are the public stakeholders' ones?"


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