For the first time in years, some boards appear to be responding to criticism of executive pay with actions, checking the perks, if not the power, of the nation's once-lionized chief executives. Over the last decade, those executives have come to expect not only millions of dollars of pay each year but also lavish pension plans, low-interest company loans (often forgiven) and deeply discounted use of a corporate jet for personal travel.
"Boards are increasingly considering the public perception that overly aggressive pay packages create," said Barbara M. Barrett, a director of three public companies, including Raytheon. There will be, she added, "a thoughtful curbing of rambunctious pay packages."
Ira T. Kay, the top pay expert at Watson Wyatt Worldwide, a consulting firm, added, "Boards definitely have more backbone than they did before."
How far directors go will not be known until early next year, when most companies publish their annual proxy statements. A significant decline in executive pay is very unlikely.
At the least, however, corporate directors have turned an eye on the more egregious perks that became so common during the boom years and appear to be stiffening their resolve when negotiating with executives who are on their way out.
"Boards are getting a little tighter-fisted," said Robert J. Stucker, a lawyer at Vedder, Price, Kaufman & Kammholz in Chicago, who represents executives during contract talks. "They're just being more careful about what they're agreeing to."
--- Marc Rodrigues Voicemail: 866.206.9067 x4217 Students for a Free Society: http://qcsfs.tripod.com
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