Show Us (Less) Money!
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How much corporate bigwigs get paid is a hot topic this political season, as the gap between the rich and the poor has reached its widest point in 60 years. Some lefty politicians (and even President Bush) have been raising the issue of whether executives are overpaid. Someone finally asked the executives themselves. Their answer? Yes.
According to a survey conducted by the National Association of Corporate Directors, two-thirds of the nearly 70 CEOs and presidents of U.S. companies polled in July and August say compensation of top executives is high relative to performance. Two percent say it is “too low,” and one-third say it is “just right.”
In a poll of the Association's own membership, the group found that 80 percent of corporate directors agree that chief executives are overpaid. Nearly 60 percent of the directors polled say the reason for the excessive compensation is a lack of objective measurements for CEO performance. Almost 50 percent of the directors criticize the still-prevalent use of stock options and equity awards that compensate executives when the stock goes up, as opposed to when the business improves.
