A necessary `say on pay'.(executive compensation)

Pensions & Investments, March, 2007

"Say-on-pay'' legislation requiring companies to have an annual, non-binding vote on executive compensation is unfortunate, but necessary. It's unfortunate because the corporate governance movement already is pushing companies in the direction of allowing shareholders a "say on pay,'' and it's generally far better for corporations and their shareholders to work these issues out themselves than to have Congress force the issue.

It's necessary because the proposal by Rep. Barney Frank, chairman of the House Financial Services Committee, likely will head off another congressional attempt to limit executive compensation by legislation. That was tried in 1993, and we all can see how well that worked. The surge in top executive compensation since then was one...

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