There is a comprehensive report on CEO compensation prepared by Ellen Simon of Associated Press which appears in hundreds of newspapers around the world beginning today. The Los Angeles Times and the New York Times are running the report as well. I was interviewed for the piece a couple of weeks ago. The thoroughness of the study makes it one of the better efforts in an area that is finally gaining wider public attention. The survey confirms what we have long contended here: there is no rhyme or reason to CEO compensation, other than the fact that CEOs are demanding and getting outrageous amounts, and boards, composed mainly of likeminded past and current CEOs, are more than happy to oblige. It’s not really more complicated than that.
I’ve had a few things to say about out of control compensation in the boardroom for a number of years and more recently here —and I’m actually a defender of capitalism and have spent my entire career working in it. I think that may be one of the reasons why the press has been rather curious about my views for the past couple of decades. When I started to raise concerns about this subject there was virtually no one else in business who would say a word about it —and there are still relatively few today, given the significance of the issue and the size of the business community.
I’ll have a further post on some of the ideas that formed the basis for the AP interview in the days ahead.