Throwing Out the Baby and Weighing the Bathwater: The Nonsense of Executive Compensation Oversight
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[Excerpt] CEO pay averages less than 2.5% of after-tax earnings of S&P 500 companies,[i] making it a rounding error on the corporate profit and loss statement (P&L), but it makes headlines and may be the one thing that rouses the passions of those otherwise uninvolved with the corporation.[ii] It is axiomatic that any given issue of The Wall Street Journal reports companies losing money on this or that, yet daily reports of spending far exceeding amounts paid to the CEO or the entire executive team do not generate Congressional action or public rebuke. Further, it does seem to matter just whose pay is at issue. Forbes reports that Tiger Woods is America’s (and the world’s) top-earning athlete, and Tyler Perry the top-earning actor, both at $78 million.[iii] This produced no debate on the floor of either the House or Senate. Madonna and Lady Gaga together pulled in $205 million as the two highest-paid musical acts,[iv] yet public concern appeared not to progress beyond a Yahoo! Answers webpage poll that simply queried “Madonna vs. Lady Gaga?”[v]
HR Review; Human Resources; executive compensation; oversight
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