The executives are often left pacing hallways outside the board room until they're given the ''all-clear'' signal. But critics say that even with such controls, the system is still shaky. The group's displeasure has in the past helped dislodge executives at IBM, Westinghouse, American Express, and General Motors Corp., Hansen said. Some executives are responding. Compensation committees are tying CEOs more tightly to their companies.
Options often have to be held until a certain date or until the stock price reaches a target price.
Even more innovative pay packages may require executives to hold up to five times their salary in company stock, at all times. Crystal argues that the fundamental flaw in the process of setting executive pay is its exclusive nature and lack of oversight. He said compensation committees aren't as independent as they should be, partly because most CEOs freely lobby committee members, some of whom are their friends. Additionally, when compiling lists of comparison companies, some directors leave in the highest-paid executives, raising the test group's average salary.