The month of April kicks off in earnest the executive pay reporting season. The Wall Street Journal is headlining today that "CEO compensation edged lower in 2009, the first time in two decades that pay declined for two consecutive years." This finding is based on a survey done for the WSJ by the Hay Group.
My first reaction to the finding was, "How could they tell?"
I am only half-jesting. I had just a week before sat in on a day-long meeting of directors hosted by Drexel University's Center for Corporate Governance. CEO pay was a big topic of discussion. The debate veered in many directions — a major one being the extreme complexity of proxy disclosures of executive compensation. The verdict seemed to be that pay data in proxies are virtually undecipherable, and what is readable borders on pure boilerplate — yielding little to no insight on the actual comp results or any sign of the governance footprint on pay policy.
I am sure the Hay numbers crunchers did their best to defog the data to come up with their findings. This is a useful survey to lead us into the fevered pitch of the proxy disclosure season.
How to avoid all this agida over CEO pay? How about if everyone followed Cary Grant's advice. As told to David Mahoney, former chairman and CEO of Norton Simon Inc. and cited in his memoir Confessions of a Street-Smart Manager, here is what the legendary actor had to say on the subject:
"Do your job and demand your compensation — but in that order."
Cary Grant had the right idea. That is proper counsel for anyone — from the CEO (and board directors) to the shop floor. If CEOs are doing their job — creating value for the shareowner — then there should be nothing to be defensive about. If you are worth it, and you know you are worth it, and your board knows you are worth it, then be steadfast under siege.
