“If you put $10,000 into the stocks of companies with the highest paid CEO’s of the previous year , from January 1991 to December of 2004, you would have ended up with only $8,079 while the same money invested into the S&P 500 would have yielded $48,350- that is, six times as much.” from Mobs, Messiahs, and Markets by William Bonner and Lila Rajova

HKO comments- I contend that CEO and executive pay in this country is obscene. The boards and compensation committees do not represent the best interests of the shareholders. I do not believe the solution lies in government interference in corporate governance. The solution lies in better shareholder participation and empowerment.

I have no problem with the wealth of executives who gain from owning the shares of the companies they run. Stock option programs are too short term focused. Executives should be forced to hold their shares for five years or longer.

The best companies are not run by the highest paid.

print