More Executives Say CEO Compensation Too High

Los Angeles, CA (AHN) - More U.S. executives are saying that salaries of their chief executive officers are way too high, according to a survey by Korn/Ferry International. On its 2007 survey only 21 percent of the polled executives said their CEO was overcompensated. The figure rose to 34 percent in the 2008 study.

The study also discovered that 80 percent of executives believe stockholders must be consulted on the level of executive pay. This new finding is a result of dipping share prices amid a continued rise in CEO compensation.

Russel Miller, managing director of Korn/Ferry's Executive Compensation Advisors, in a statement, said, "The tumultuous economic environment highlights the challenges with getting pay for performance right... The business community continues to focus on aligning pay and performance, and companies are having mixed success against this objective."

Meanwhile, the AFL-CIO partly blamed the "outrageous pay packages" for bankers for the current credit crisis that had spread to different parts of the globe. The labor group, which owns major shares in public companies, wants a legislation that would mandate shareholders' say on executive compensation.

A bill was approved by the House in 2007, but got stuck in the Senate. Even prior to the legislation of such a law, 100 U.S. companies including General Electric and Wal-Mart Stores are slated to decide on "say on pay" proposals on spring.

Richard Trumka, AFL-CIO secretary-treasurer, in a press briefing, quoted by AP, said, "When CEOs are paid obscene amounts to make bad decisions, it hurts average Americans who hold mortgages, who have bank accounts and who are invested, such as through their pension."