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Giving the leaders their due: achieving balance between executive pay and corporate governance


Striking the right balance on executive pay

IbyIMD+ Published 13 October 2022 in Leadership • 7 min read

Boards should see shareholder rejections of inflated CEO compensation as a serious warning of the social and commercial dangers of pay inequity.

Shareholders’ rejection of CEO pay packages is now headline news. JP Morgan Chase’s CEO Jamie Dimon, GE’s CEO Larry Culp and Intel’s CEO Pat Gelsinger have all seen shareholders vote down their proposed pay packets in the past two years, and they are not alone: 2021 saw the highest-ever proportion of S&P 500 shareholders voting against CEO compensation proposals, plus the lowest average support for such ballots across all these businesses. Both records look set to be broken in 2022. Nor is this shareholder unrest restricted to the US. Rio Tinto and Morrisons have seen similar votes against executive pay proposals. What do these votes mean and how should companies respond?  

Keep an eye on the CEO’s paycheck 

Controversy over CEO pay within corporations is far from new. As long ago as 1990, Harvard Business Review spoke of the long-established springtime ritual of the business press trumpeting high CEO pay figures, with politicians, union leaders and consumer…

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