Pfizer, BMS, Schering-Plough Scrutinize CEO Pay: Will Shareholders Call the Shots?

Pharma's chief executives are, without a doubt,  well paid.  And, regardless of industry, at most companies in the U.S., the average CEO earn mores in one day than his or her average employee earns in a year.  OK. It's a an extremely stressful job. But what if an individual CEO's performance has been poor? What remedies do shareholders have? For a nice analysis of this issue, read Columbia University law professor Jeffrey N. Gordon's Executive Compensation Trends    More shareholders are speaking up, though.  A few years ago, GSK's board rejected the $36-million golden parachute intended for the company's CEO, which had originally been proposed regardless of performance. But lately,  the whole subject of unchecked, performance-unrelated CEO salaries is generating as much "buzz" as Sarbanes-Oxley was a few months ago. Last week, representatives from Pfizer, GSK and other companies reportedly met to discuss ways to address this. For an update from Chicago on what they talked about, read this brief article that appeared in the Daily Herald.  Other industries are already taking action.  Today, news came from the insurance company, Aflac (of "quacking duck" advertising fame), of a new approach outlined in this Chicago Tribune article.   For an interview with watchdog Brian Foley, click here. Even the Federal Reserve Chairman apparently touched very briefly on this subject in his Congressional testimony today.  Below, a Bloomberg minute.

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Bloomberg - (BLOOM)

Feb. 15, 2007. 12:30 PM EST