Are CEOs worth the millions in compensation they receive?
CEOs of some of the largest U.S. companies are paid more than $100 million a year in salary, bonuses, stock and stock options. Stockholders who participate in votes on these pay packages almost always back them, although the occasional company faces resistance. Some analysts say CEO pay levels—which can be hundreds of times higher than those of rank-and-file employees, and don't always reflect company performance—are simply a result of the free market. Others say the system for setting pay is broken. Some of the key issues under debate: Is CEO compensation too high? Are “say-on-pay” votes affecting compensation? Is it a good idea to tie CEO compensation to company performance?
Dorff, Michael B., “Indispensable and Other Myths: Why the CEO Pay Experiment Failed and How to Fix It,” University of California Press, 2014. A professor at Southwestern Law School argues performance-based executive pay has not improved corporate performance.
Markham, Jerry W., “A Financial History of Modern U.S. Corporate Scandals: From Enron to Reform,” Routledge, 2015. A professor at Florida International University College of Law recounts the collapse of Enron Corp. and other 21st-century financial scandals.
Thomas, Randall S., and Jennifer G. Hill, eds., “Research Handbook on Executive Compensation,” Edward Elgar, 2012. Top scholars contribute essays on executive compensation, assessing research in the field.
Cahill, Joe, “Caterpillar shareholders speak. Directors should listen,” Crain's Chicago Business, June 13, 2015, http://tinyurl.com/
Gelles, David, “For the Highest-Paid C.E.O.s, the Party Goes On,” The New York Times, May 16, 2015, http://tinyurl.com/
Goldman, David, “Marissa Mayer docked $13 million and still made $42 million,” CNNMoney, April 30, 2015, http://tinyurl.com/
Hiltzik, Michael, “JPMorgan's Jamie Dimon is fed up with you ‘lazy’ investors voting against him,” Los Angeles Times, May 29, 2015, http://tinyurl.com/
Morgenson, Gretchen, “Shareholders' Votes Have Done Little to Curb Lavish Executive Pay,” The New York Times, May 16, 2015, http://tinyurl.com/
Rothwell, Steve, “The top 10 highest-paid female CEOs,” The Associated Press, May 29, 2015, http://tinyurl.com/
Reports and Studies
“Report of the NACD Blue Ribbon Commission on the Compensation Committee — Executive Summary,” National Association of Corporate Directors, June 9, 2015, http://tinyurl.com/
“200 Highest-Paid CEO Rankings,” Equilar, May 16, 2015, http://tinyurl.com/
Frydman, Carola, and Raven E. Saks, “Executive Compensation: A New View from a Long-Term Perspective, 1936–2005,” The Review of Financial Studies, Feb. 2, 2010, http://tinyurl.com/
Mishel, Lawrence, and Alyssa Davis, “Top CEOs Make 300 Times More than Typical Workers,” Economic Policy Institute, June 21, 2015, http://tinyurl.com/
Murphy, Kevin J., “Executive Compensation: Where We Are, and How We Got There,” Social Science Research Network, Aug. 12, 2012, http://tinyurl.com/
The Next Step
Gavett, Gretchen, “Is Your CEO's High Salary Scaring Away Customers?” Harvard Business Review, June 4, 2015, http://tinyurl.com/
Hamilton, Jesse, “Fannie, Freddie CEOs Get Pay Raises as White House Objects,” Bloomberg Business, July 1, 2015, http://tinyurl.com/
Melin, Anders, “How Companies Justify Big Pay Raises for CEOs,” Bloomberg Business, June 4, 2015, http://tinyurl.com/
Pay and Performance
Canipe, Chris, and Sarah Slobin, “CEO Pay vs. Performance,” The Wall Street Journal, June 24, 2015, http://tinyurl.com/
Delevingne, Lawrence, “Wall Street CEO pay vs. shareholder gains: Who won?” CNBC, May 28, 2015, http://tinyurl.com/
Gordon, Sarah, “Top managers' pay reveals weak link to value,” Financial Times, Dec. 28, 2014, http://tinyurl.com/
Kerber, Ross, “U.S. pay gap also problematic in C-Suite,” Reuters, June 19, 2015, http://tinyurl.com/
Morgenson, Gretchen, “Despite Federal Regulation, C.E.O.-Worker Pay Gap Data Remains Hidden,” The New York Times, April 10, 2015, http://tinyurl.com/
Rudegeair, Peter, “Pay Gap Between Wall Street CEOs and Employees Narrows,” The Wall Street Journal, April 5, 2015, http://tinyurl.com/
Shecter, Barbara, “Canadian shareholders increasingly aggressive on ‘say-on-pay,’” Financial Post, May 1, 2015, http://tinyurl.com/
Syre, Steven, “Nuance Communications one of nine US companies to flunk 'say on pay,'” The Boston Globe, May 19, 2015, http://tinyurl.com/
Waters, Richard, “Salesforce shareholders protest vote against Benioff pay deal,” Financial Times, June 10, 2015, http://tinyurl.com/
815 16th St., N.W., Washington, D.C. 20006
Umbrella federation for 56 U.S. unions that monitors corporate governance.
Center on Executive Compensation
1100 13th St., N.W., Suite 850, Washington, DC 20005
Represents human resources executives at large U.S. companies on executive compensation issues.
Corporate Governance Research Initiative
Stanford University, 655 Knight Way, Stanford, CA 94305
University institute that conducts research on corporate governance.
Economic Policy Institute
1333 H St., N.W., Suite 300, East Tower, Washington, DC 20005
Think tank that researches the economic status of low- and middle-income workers.
1100 Marshall St., Redwood City, CA 94063
Private firm that compiles executive compensation data for clients, including companies and institutional investors.
Institutional Shareholder Services
702 King Farm Blvd., Suite 400, Rockville, MD 20850-4045
Private firm that provides research to institutional investors and corporations; advises investors on proxy voting.
John L. Weinberg Center for Corporate Governance
University of Delaware, 303 Alfred Lerner Hall, Newark, DE 19716
Academic center that conducts research and holds forums on corporate governance.
National Association of Corporate Directors
2001 Pennsylvania Ave., N.W., Suite 500, Washington, DC 20006
Membership organization of more than 15,000 corporate directors; conducts research and runs education programs.
Securities and Exchange Commission
100 F St., N.E., Washington, DC 20549
Federal agency that requires public companies to disclose meaningful financial and other information; also regulates securities exchanges, securities brokers and dealers, investment advisers and mutual funds.