Executives may well have deserved their bumper bonuses during the decade long expansion. Their efforts pushed profits higher and their companies could afford to reward performers generously. But as the economy contracts, so too should their share of the pie if shareholders have anything to say about it.
According to figures from the New York Times, in comparison to 1999, in 2000 the average major-corporation CEO received:
- a 50% increase in stock options
- a 22% increase in salary and bonus pay
All at a time when the S&P 500 fell by 10% and the NASDAQ shed 40% of its value.
Shareholders appear to have had enough. The padded paychecks of the past have come under fire of late, with the number of resolutions concerning executive compensation doubling to 42 in 2000, according to Institutional Shareholder Services (ISS).
In addition, the number of shareholder proposals on the subject of executive pay has increased by 24% this year, and while in only 8.5% of shareholders opposed stock option plans in 1998, by 2000, the figure stood at 21.8%, according to the Investor Research and Resource Center (IRRC)
Read the full story at: Upfront: Compensation Crusade