Shareholder backlash on executive pay issue looms

Companies like RadioShack and Oracle buck the trend by continuing to offer huge compensation packages for execs

Executive compensation is an enormous topic for board, shareholders and other interested parties. Some companies have decided to structure their executive pay plans around incentives and stock options, while others have taken a long and hard look at whether skyrocketing executive compensation is bad for business.

The overall trend, based on the cries of the loudest stakeholders, is to decrease these compensation packages, bringing the sky-high pay of executives closer to earth. But not all companies have followed this trend, as businesses like RadioShack, Oracle and Nabors have decided to continue to give top executives huge paychecks, according to The Wall Street Journal, going against the clear wishes of shareholders.

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The CEO of Oracle, Larry Ellison, was the highest paid executive of 2013, raking in almost $77 million in total compensation. Nabors, a petroleum company, gave more than $100 million to a retiring CEO in 2011 and this year, shareholders expressed concern about a $45 million payout to the company’s current CEO.  As for RadioShack, the electronics retailer did not get majority support for its proposed executive pay packages the past two years, as the company has suffered through store closings and restructuring.

The topic of so-called “say-on-pay” plans has been a hot one, since the topic of executive compensation became such a large part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Companies are now required to hold these say-on-pay votes and, though they are non-binding, many companies have listened to shareholder outrage and adjusted pay packages following failed votes.

 

 

 

 

Senior Editor

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Rich Steeves

Richard P. Steeves is Senior Editor of InsideCounsel magazine, where he covers the intellectual property and compliance beats. Rich earned a B.A. in English Literature...

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