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Australian plan to curb CEO pay merits consideration

Here’s an idea that would, despite being far from foolproof, seem to be worth at least considering in the U.S.: Australia’s law to require significant corporate shareholder majorities to approve CEO compensation plans.

This is from the the people at Inequality.org and their weekly newsletter Too Much:

“One of the world’s more complicated schemes to tamp down CEO pay is getting a test in Australia this fall. Since last July, Aussie corporate boards have had shareholders voting on CEO pay. But this advisory “say on pay” has a twist. A board that fails to get 25 percent of shareholders to bless its CEO pay two years in a row has to face a shareholder vote on whether to give the entire board a heave-ho and elect a new one. Last year, 108 firms failed to hit that 25 percent mark. Now boards seem anxious to avoid two-time loser status. CEO bonuses at top Australian firms have dipped 20 percent since last year. But execs, activists add, are still playing games: Aquila Resources chair Tony Poli had his most recent annual pay reported as $572,000. He actually took in $169 million.” 

 

2 Comments

  1. Frances Jenkins

    October 1, 2012 at 9:42 pm

    That is called socialism, no merits to this plan.

  2. david esmay

    October 2, 2012 at 10:52 am

    Frances, your snarky remarks are the definition of stupidity, no merits to your statements. Consider the fact that wages for average Americans have been stagnant for 30 years and the pay of CEO’s has risen 725% since 1978, or 127 times faster than pay for workers.