Measuring executive pay — and responsibility

Federal regulators are drawing up new rules for executive pay disclosures. The rules have become the focus of a new fight over how much CEOs should get paid, and how that figure should be communicated to the public.

Michael Hiltzik
LA Times
August 21, 2011

When Nintendo slashed the price of its 6-month-old 3-D game device by nearly a third (to $169.99) a few weeks ago, company President Satoru Iwata voluntarily took a 50% pay cut.

That wasn't the first time in history that a corporate CEO took a pay cut, of course. But what made the event more unusual was Iwata's choice of whom to blame for the botched rollout of the Nintendo 3DS — himself.

"I feel greatly accountable for having to make the markdown shortly after the launch, for having damaged our consumers' trust, for having made a significant impact upon the financial forecasts," he stated.

That was in stark contrast to the position taken by another CEO halfway around the world, when asked whether he should accept responsibility for the legal and public relations disaster facing his company by resigning.

"Nope," Rupert Murdoch replied to a British parliamentary committee investigating phone hacking by his News Corp. minions. "People I trusted have let me down," he said. "It's for them to pay.... Frankly, I'm the best person to clean this up."

(More here.)