Executive Compensation Reform Gets Some High-Profile Backing
It had to happen.
Last week, presidential candidate Barack Obama called for new legislation that would give shareholders a greater “say on pay” for corporate leaders. A boiling issue beforehand, this hot button is starting to glow.
Executive pay is now a political football, as increasing economic uncertainty has all three presidential candidates using the issue to buttress their populist appeal. Sen. Obama’s clarion call echoes similar sentiments expressed by both Sen. John McCain and Sen. Hillary Clinton.
Just last week, we used this space to posit that companies who deal aggressively with executive compensation issues can create the opportunity to position themselves better. As it has always been, the key issue is the need to focus on performance ahead of time. If boards hope to retain their right to decide top pay packages, they are going to have to fight back–not necessarily by changing the pay, but by changing the perception.
