CEOs openly oppose push for say-on-pay by shareholders
— -- Top executives have taken a relentless public thrashing as they lay off workers and fight to keep stock prices above the floor. In a suffering economy, no one seems happy with leadership, and the image of CEOs has sunk so low that their approval scores are now south of those serving in Congress. But no matter how low their image sinks, nor how shrill the outrage, executives have remained steadfast in their opposition to one thing: They are roundly against legislation that would force companies to let shareholders vote on CEO compensation packages.
"I wonder if the congressmen backing this legislation would propose similar laws governing their own compensation," says Steve Hafner, CEO of travel search engine Kayak. "I'd love to vote on congressional pay and perks."
That executives oppose congressional noodling with their pay is unsurprising. What is surprising is that they are willing to go so public in their opposition, even though passage of a so-called "say-on-pay" law is likely, says Dawn Wolfe, associate director of social research for Boston Common Asset Management.
President Obama, who co-sponsored say-on-pay legislation while in the Senate, remains in support, as is the Democrat-controlled Congress. Likewise the public at large. Focus groups have been describing CEO pay with words such as "obscene" and "immoral" rather than words like "excessive" or "overly generous" as in the past, says Leslie Gaines-Ross, chief reputation strategist at Weber Shandwick.
"Everyone I talk to understands say-on-pay legislation to be a question of when, not if," Wolfe says. "There is a sense in the investment community that it is inevitable."
CEOs have opinions like everyone else, but the public rarely sees that side because positions on anything controversial risk upsetting customers. When they feel compelled to take a stand at odds with the public, it is usually articulated by trade associations and lobbyists, so as to put CEOs and the companies they run at arm's length from controversy. Not this time. Even though say-on-pay legislation is almost a sure thing, CEOs and former CEOs contacted by USA TODAY spoke out against it, both forcefully and individually.
"Say-on-pay is just another government regulation and intrusion into free enterprise," says Howard Putnam, former CEO of Southwest and Braniff airlines.
No one likes downward pressure applied to their pay, and in this respect CEOs are no different than professional athletes, rock stars, union members, Social Security recipients — and elected officials. Howard Behar, former president of Starbucks, asks: Why not let people vote on the salaries of government workers? He says government employee unions influence politicians, who commit huge resources to pensions and raises to get re-elected.
