Who Moved My Bonus? Executive Pay Makes a U-Turn

By KATHRYN JONES
NYT

BIG corporations, buffeted by widespread economic pain and heightened scrutiny of lush compensation packages, appear to be paying attention to a longstanding complaint from shareholders: When it comes to executive pay, greed — even the appearance of it — is not good.

Executive compensation for the highest-paid chief executives at public companies fell in 2008, the first such downturn in five years. And the bottom dropped out of the bonus pool, the incentive that angered investors after the controversial bonus payouts at the American International Group.

“We could begin to see a fundamental sea change in the compensation of executives,” says Charles M. Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware.

“The idea should be that compensation is related to the overall value of the company,” he adds. “If shareholder value has fallen, so should the value of the executive pay package. Pay should reflect company performance and align with shareholder interests.”

(More here.)