Executive compensation and the actions of compensation committees clearly will be the next focus for corporate governance’s bright light.
Consider the furor over Richard Grasso’s compensation and the NYSE’s reaction. Combine that with no less a shining light than Warren Buffet, who believes corporate governance will not be truly effective until it reaches into executive compensation issues. Finally, look at the most recent proxy season. The 2004 proxy season was just under way and the Investor Responsibility Research Center reported that more than one-third of the shareholder proposals addressed executive compensation issues.