U.S. CORPORATIONS Shareholders put focus on execs' high pay

American CEOs, on average, make 240 times what their employees are paid.
CAMBRIDGE, Mass. (AP) -- Plenty of executives still don't earn their exorbitant salaries, but there are signs angry shareholders' displeasure is starting to register among companies, a shareholder activist told business journalists.
Traditionally secretive state pension funds in places like Massachusetts are also suddenly finding it fashionable to use their shareholder clout to push companies to disclose executive perks, said Scott Klinger, the co-director of the Responsible Wealth Project at United for a Fair Economy.
"We're seeing companies competing on how much they can disclose," Klinger told the Society of American Business Editors and Writers 40th annual conference on Monday.
"What's the biggest thing we've been able to say to get (Massachusetts) to move more in that direction? 'Connecticut is doing it,"' Klinger said during a panel discussion on executive pay.
Problems remain
But Klinger and co-panelist Jack F. Williams, a professor at Georgia State, said many of the serious structural problems that cause excess compensation remain, including "bankruptcy proof" provisions and blurry corporate structures.
In Europe, Williams noted, the job of chief executive and chairman are almost always held by separate people, while in the United States one person often holds both jobs.
It's no coincidence, Williams said, that CEOs at top American companies earn 240 times the salary of typical workers at their companies, while in Europe it's between 12 and 25 times. "You have a blurring of what are distinct governance lines," Williams said.
Klinger cited a chart showing the performance of the Standard & amp; Poor's 500 companies that paid their CEOs the most between 1993 and 2002. Investing each year in the company that paid its CEO the most during the previous year would have reduced a $10,000 portfolio to barely a quarter of its value over that period, while investing in an S & amp;P index fund would have more than doubled it.
"We have a handful of people making more than they could spend in three lifetimes and millions of people just trying to get by," Klinger said.
Part of the media's job is to explain to the public the tricks companies use to boost executive pay packages, the panelists said.
Don't glamorize
Journalists should also avoid glamorizing executives simply because they make big money, Klinger said. Many CEOs, he said, have other motivations -- some more interesting than money.
"Who's the new hero?" Klinger said. "It doesn't take millions of dollars to get somebody out of bed in the morning."
The panelists said change is coming, thanks to shareholder pressure -- which both called a better mechanism than government regulation.
"Institutional investors are starting to look for greater specificity of disclosure on perks," Williams said.