Stories
Slash Boxes
Comments

SoylentNews is people

posted by cmn32480 on Monday August 03 2015, @04:03PM   Printer-friendly
from the how-much-is-enough dept.

The San Jose Mercury News reports that some boards of publicly traded companies in Silicon Valley appear to have become more sensitive to shareholder concerns about runaway CEO compensation, apparently in reaction to a provisions in the Dodd-Frank Wall Street Reform Act of 2010. Two of these provisions, which apply to publicly traded companies, are 1) "say on pay": a requirement that a non-binding shareholder vote approving or disapproving of the CEO's compensation, be held at least once every three years; and 2) "CEO pay multiple": a requirement that the firm disclose the ratio of total compensation of the CEO to that of the firm's median employee salary or wage.

It's important to realize that shareholder votes are based on one share, one vote (rather than one person, one vote); the big shareholders, which tend to be deep-pocketed institutions such as mutual funds and pension funds, dominate the proceedings.

Oracle, biotech company Gilead Sciences, and pharmaceutical distributor McKesson, were mentioned by Mercury News as examples of companies based in Silicon Valley whose CEOs have taken pay cuts in the last year. McKesson's CEO lost the non-binding shareholder vote after Glenn Gray, a warehouse worker who made $16/hr, stood up at the shareholder's meeting to contrast the CEO's compensation with those of rank-and-file workers struggling to make ends meet. Gray was subsequently fired, but his job was later reinstated under court order. He says he has no regrets about speaking out:

My objective was not to tell shareholders [McKesson CEO] John Hammergren deserves this or that. I was speaking for the employees back on the plant who were afraid. You've got some really, really struggling people in Florida.

Recent "say on pay" shareholder votes at Salesforce and Yahoo! also attracted attention, but the dissidents opposing the CEO pay packages failed to win the majority of votes cast.


Original Submission

 
This discussion has been archived. No new comments can be posted.
Display Options Threshold/Breakthrough Mark All as Read Mark All as Unread
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
  • (Score: 0) by Anonymous Coward on Monday August 03 2015, @09:04PM

    by Anonymous Coward on Monday August 03 2015, @09:04PM (#217587)

    When will people understand why CEOs are paid regardless of performance? It has zero to do with doing the job, it has everything to do with not using the job for personal gain. The ridiculous CEO pay is essentially how private sector "fixed" the problem of corruption. If you pay a CEO more than he could steal by concocting some sort of scheme that would blow up int he share-holders' faces, you essentially isolate that type of a problem. A CEO who feels uncompensated can do a lot of damage to the company and it's market cap.

    That right there is why they get paid so much, and why they will continue to be paid so much. Unless you have a magic wand that can turn all people into honest-do-gooders, please accept the fact that this is a natural reaction to human nature.