Corporate Governance

Even Board Members Believe CEOs Pay Is Too High

By Fei-Lu Qian

According to a just-released survey by Heidrick & Struggles International, Inc. and the Center for Effective Organizations at the University of Southern California?s Marshall School of Business, nearly 33% of directors of public companies surveyed believe that chief executive officers? pay are ?too high in most cases.? This is a significant increase compared to only 25% of directors in 2001 who thought that CEO pay were too high. Furthermore, board members mainly attribute the increase in CEO compensation to ?actions of compensation consulting firms and the creation of new incentive compensation programs.? In the press release, the director of USC Marshall commented that issues such as CEO pay ?are a growing concern even among the people most responsible for dealing with them: the board members of public companies.?

Additionally, the survey also found that nine out of 10 directors believe ?CEO pay should be no more than two to three times higher than the next highest paid executive.? Not surprisingly, CEOs who participated in the survey ?were much less likely to believe CEO compensation is too high than were non-CEO board members.?

Full post as published by PomTalk on February 06, 2008 (boomark / email).