September 17, 2006
New Glass Lewis Study on Executive Compensation
The new Glass Lewis study on executive compensation is a devastating rebuttal to those who support the current levels of compensation. Among other conclusions, the twenty-five companies with the worst record of excessive pay for poor performance, the compensation average $16.7 million in 2005 and the companies income dropped an average of 25 percent (the stock value dropped an average of 14 percent). The executives of such companies drained 6.4 percent of the losing companies' total net income in compensation payments! This is just institutional theft. The top twenty-five companies paid an average of $4.4 million, only .2 percent of the companies total net income. There is no longer any doubt that executive compensation systems are not working in significant number of American corporations.
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