Mike Kueber's Blog

March 4, 2013

Out of control CEO pay – a reasonable response

Filed under: Business — Mike Kueber @ 1:38 am
Tags: ,

Voters in Switzerland earlier today approved a referendum that makes sense for America, too.  According to an article in the NY Times, the Swiss voters have declared that stockholders should be required to approve compensation packages for executives and directors.  

Although the Times article is titled, “Swiss voters move to restrict pay of executives,” the title misleadingly suggests that the voters are attempting to interfere with the law of supply & demand.  That is not accurate.  Executives and directors can still be paid whatever they agree to pay each other; the only change is that the stockholders must concur with the compensation packages.  That is not messing with supply & demand, but rather is merely improving corporate governance to ensure that executives and directors do not raid the corporate treasury. 

Great idea.


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