1. Executive Pay Gets Boost From Common Owners

    Executive Pay Gets Boost From Common Owners

    The better the company performs compared to its peers, the more top executives should receive in pay, bonuses and stock awards. Right? But that isn't always how it works in practice. Executive pay packages that don't include a comparison of company performance and that of its competitors are regularly approved by boards of directors, and many have wondered why...

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    1. Many people have been puzzled why shareholders approve pay packages that lead to high pay without much benchmarking.
    2. If you benchmark performance against rival companies, that gives managers an incentive to compete aggressively. If you own a number of companies in the same industry, you don't want that to happen.
    3. We don't know what precisely is said in these meetings, but the mere fact that they happen, combined with the effects they have, is indication enough that regulators may want to pay attention to executive compensation as an element of antitrust policy.
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