CEORater has published a number of CEO compensation studies over the years. The truth is we probably do not allocate sufficient weighting to compensation in our CEOs of The Year awards. The Wall Street Journal published an insightful piece on Technology Founder/CEO compensation, which we have previously written about.
Our view is that public company boards have the right to set compensation as they see fit. However, whatever happened to the “pay for performance” principle? This principle does not only apply to rank and file employees, but also toward senior executives. Poor corporate governance is to blame for the lack of operational rigor around many executive compensation plans. Too many Board members are simply interested in collecting a check and do not wish to rock the boat for fear of being removed by a strong CEO. Too few institutional investors care and would not know how to go about evaluating operating performance or building a compensation plan linked to performance. The “pay for performance” principle is a simple one. That is the beauty of it. Reach out to us should you want assistance on evaluating a particular CEO’s compensation plan. Find us at email@example.com or firstname.lastname@example.org