Thursday, October 11, 2007

More executive pay lunacy

The (mis)use of options is not the only problem with current executive compensation schemes. As this article explains, there's the issue of transparency. The SEC's chairman offers a pithy quote:

The rules significantly expanded the disclosures that companies are required to make about compensation for their highest-paid executives. Christopher Cox, SEC chairman, has said that investors "should not need a machete and a pith helmet to go hunting for what the CEO makes".

But it also presents a fact that is capable of shocking even a jaded veteran such as yours truly: CEOs often make as much as ten times as their top lieutenants. Wow. This is just plain nuts.

Kudos to the SEC for finally beginning to address these issues.