Compensation Committees everywhere are feeling the heat of intense public scrutiny. Nothing tarnishes a board (or attracts regulators) like a CEO walking away with a huge pay package while being forced out for nonperformance, or when a bull market makes the dollar amount of compensation obscenely large. Michael Ovitz’s $140 million severance package, Jean-Marie Messier’s
million severance, and Richard Grasso’s $187.5 million pay package may be exceptional, but they made headlines and put all boards under fire.
The challenge to Compensation Committees is clear: ensure that compensation plans pass the test of common ...