[Azure]

Originally Posted by Fighting Banana Slug

As someone who works in this space, I think both Slava and Jammies are correct in many respects. Executive pay is already highly regulated, in the sense that public companies must provide shareholders a comprehensive breakdown of executive compensation. Read National Instrument 51-102F6 if you are interested, or are having trouble sleeping at night. In addition, shareholder advocacy groups such as ISS or Glass/Lewis provide recommendations to shareholders based on many disclosure factors. Companies do feel the pressure to heed these recommendations. The result of which is that companies tend to emphasis variable or "at risk" pay for the top executives. Their base salaries are often quite reasonable and the real dollars come from the uptick on options and share based compensation.

The problem that I have with the current system, is that the "at risk" pay is still woefully out of touch. If a company does very well, fine, the millions in variable/share based pay may be defensible. However, in recent years, company performance has been on the whole poor, yet executives may still walk away with millions, with it justified by blaming the economy/factors beyond the executive's control/grading on the curve. That reasoning doesn't seem to permeate when times are good, and the CEO's might be simply riding the wave of good times (high oil prices in this town) to justify monstrous compensation. The system would work much better if the "at risk" pay was actually, you know, at risk.

Not only that, but often times even when the CEO is 'fired' the severance package is completely out to lunch.