CEO pay is out of sync with rhyme, reason or decency. As an adage it makes sense - it's worth overpaying a little, maybe even a lot, for performance. But CEOs and their handpicked boards are interpreting the phrase as a literal inducement to grab any sum they can. Uniformly, they justify their inflated packages as tying their returns to those of shareholders. But this is rubbish.
Salaries are relatively level, albeit at seven figures.
But according to Executive Compensation Reports, a Springfield, Va. newsletter, options of 250,000 shares, once rare, are now doled out by 1 of 4 companies. Paid consultants are quick to note that executives profit from options only if the shares go up. Over a decade, executives who get enough options will make a killing from even mediocre performance or worse. And the size of grants is spiraling. Since then, General Electric's board, like many, had an apparent revelation as to its chairman's need for motivation.