Magazine : Archives : 2nd Quarter 2006

Who’s Responsible for Those Crazy CEO Pay Packages?

Oh, could it be the directors? Last year, as executives responsible for corporate accounting scandals were going to trial, boards got a free pass. "We had no idea," the directors said, and for the most part, it was plausible; the shenanigans were well hidden from board view. Not so with this year's eyebrow-raising, stratospheric CEO compensation. Boards approve pay packages. They presumably think about severance, sign-off on dazzling golden parachutes, and ponder the future implications of today's option and restricted stock grants. The issue here is quite clear: Is it right for the CEO of a public company to make...