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Anil Dilawri

  
Taking Investor Relations to the Next Level

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Do CEOs Get Paid Too Much?

Barack Obama announced today that he wants shareholders to be heard when it comes to executive Stack_of_money_3compensation.

During periods of economic turmoil and downward moving stock prices we always see executive compensation come to the forefront as a topic.

When a company’s stock goes up, nobody complains about executive compensation.  When a stock goes down, everything is up for scrutiny (executive compensation, company strategy, financial discipline, product/service offering, etc.).

So, is it fair to pick on the CEO and the size of his/her compensation package during tough times?  Perhaps the better question is – who decides the CEO’s compensation? 

The answer is clearly the Board of Directors.  In my opinion there are two levels of accountability when it comes to executive compensation:
1) The CEO - being a CEO is high risk, high reward proposition.  If you do well, you do very well.  If you do poorly, you’re out (few questions asked).
2) The Board of Directors (more specifically the Compensation Committee) - it is the Board’s responsibility to represent the shareholders, ensure that a CEO is held accountable, and ensure that a CEO is compensated appropriately.

As opposed to getting all shareholders involved in a debate on executive compensation let’s look towards the Board of Directors to be more accountable in managing the CEO.

After all, if shareholders don’t like the job that the Board is doing, the mechanisms are already in place to vote them out.


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Published 11 April 2008 19:20 by Anil Dilawri

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About Anil Dilawri

Anil is Director of Hill & Knowlton Canada’s Investor Relations group. He provides strategic counsel and leadership to publicly traded companies and/or organizations that are planning an initial public offering. His value is his ability to develop modern day investor relations strategies, policies and procedures to ensure that a company’s investor relations program is effective in meeting the needs of shareholders, prospective shareholders, financial media, company management, and the Board of Directors. Anil has a vast amount of experience in communicating with members of the North American and European investment communities. This community includes sell-side analysts, buy-side shareholders, prospective institutional shareholders, retail shareholders, and financial media. Before joining Hill & Knowlton Anil was the head of investor relations for March Networks Corporation where he was the strategic leader and day-to-day contact for a number of March Networks’ key stakeholders, including financial analysts, shareholders, media, and industry associations. Prior to March Networks Anil was at Cognos Corporation where he held several senior positions in investor relations, product marketing, and research and development.
 
 
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