Errors and Omissions

A salute to the Times' series on executive pay

The New York Times has been publishing a series of articles on executive pay for the past two months. While this story has had a long run (boiling over perhaps around the Jack Welch divorce case and its exposure of the innumerable perks that comprised his retirement package), the Times series is doing a great job of detailing the vast scope of the problem--from perks to options, from weak shareholders to rubber-stamp boards.

Today's page one article shows in stark relief the pay given to Home Depot CEO Robert Nardelli as compared to his predecessors, the company's founders Arthur Blank and Bernie Marcus. While the latter two never received more than $1 million in salary and often refused bonuses, according to the article Nardelli has received nearly $250 million in salary, bonus and stock-related compensation over the past five years.

Moreover, it focuses on the role the board has in approving such large pay packages. The Home Depot board has several members with ties to GE, Nardelli's former company.

For a public company, the board of directors serves as the CEO's boss. The inability to restrain CEO pay must be laid at their feet.

And for CEOs, if you want to make billions, start a business or invest your own money. Take some downside risk. Don't lever up on the public shareholders' dime.

business, newspapers, media, compensation

posted by Unknown @ 5/24/2006 09:54:00 AM