How to Pay Your CEO

| Mon Apr. 10, 2006 5:00 PM EDT

Can we call it corruption?

In other words, the very firm that helps Verizon's directors decide what to pay its executives has a long and lucrative relationship with the company, maintained at the behest of the executives whose pay it recommends.
No, we'll call it corporate capitalism. The New York Times has a fantastic story today looking into the process by which corporations pay their CEOs. Arrangements like the above are hardly uncommon. And executive compensation often bears no relation to the actual performance of the company. Among other things, the story cites one study identifying 11 major companies "whose shareholder returns had been negative for five years, but whose chief executives' pay had exceeded $15 million during the last two years combined." Lucky them.

MORE: See this story for more. "The average pay for a chief executive increased 27 percent last year, to $11.3 million." This at a time when median wages have stagnated.

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