Widespread outrage over abusive executive pay practices has some companies going to unusual lengths to gain shareholder support for the way they compensate their top earners.Amgen, Inc. (NASDAQ: AMGN) has invited its shareholders (subscription required) to fill out a ten question online survey assessing the level of executive pay, the clarity of proxy statement disclosures related to compensation, and how well pay practices are aligned with performance and shareholder value. Other companies are instituting similar programs, and more are expected to follow.
This appears to be a case of the lady protesting too much: After years of treating shareholders like members of the untouchable caste, public companies seem a little too eager to ask for their input. The truth is that instead of filling out online surveys, shareholders should be demanding the exile of compensation committee members who participated in awarding pay packages that are not in the best interests of shareholders.
The other problem with these surveys is that they're much, much more likely to be offered by companies that already have good pay practices in the first place: If your kid rushes home from school to show you his report card, you probably don't need to worry too much about it. It's the companies that are silent on their pay practices that you have to keep an eye on.
Corporate governance in America desperately needs an extreme makeover, and I somehow doubt that Javascript surveys are going to be our savior on this one.
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Reader Comments (Page 1 of 1)
4-06-2009 @ 9:36PM
ij70 said...
It is advertisement and a viral campaign. Shareholders will be more likely to pull their money from the "quite" companies and possibly unmake them. Real capitalism.