October 21, 2013
True Pay-for-Performance: Going Back to Finance Basics
– Broc Romanek, CompensationStandards.com
Two Sundays ago, the NY Times ran this column about the overreliance on stock prices when setting executive pay levels. Here’s a quote from Nell Minow: “A statistic I’ve seen that makes sense to me is that 70% of executives’ stock option gains are attributable to the market’s movement as a whole.”
Mark Van Clieaf, an organizational & pay-for-performance consultant and partner in the newly formed “Organizational Capital Partners,” contributed the analytics for the article. Among the disturbing findings by Mark and the OCP team is that 18 Fortune 300 sample companies lost $134 billion – but yet they paid the top 90 officers a whopping $3.1 billion in executive pay. And the proxy advisors – ISS and Glass Lewis – only recommended against three of the 18 companies! Here’s Mark’s support for the stats shared in the NY Times piece – and here’s a related article…