While excessive executive pay levels continue to inflame dissident shareholders and irate citizens, trends indicate that corporate compensation committees increasingly are bowing to shareholder demands by linking pay to performance and disclosing their incentive plans to investors.
"Companies are listening to their [shareholders] concerns by proactively developing more shareholder-friendly pay practices," says Ira Kay, global director of compensation consulting at human capital and financial management consulting company Watson Wyatt. "While not all companies have yet to follow suit, both shareholders and the Securities and Exchange Commission (SEC) can be pleased with the trend."
It's about time, insist public interest groups. The nonprofit Institute for Policy Studies recently reported that top executives make nearly 350 times more than the average American worker. The differential has swollen nearly 10 times in the past 30 years. In 1977, chief executives made 30 to 40 times more than their workers.
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