CEO Pay for failure

“A study released earlier this year by the Corporate Library — and titled “Pay for Failure” — singled out some of the corner suite’s worst offenders. Among them: Pfizer CEO Henry McKinnell; Merck former CEO Raymond Gilmartin; and AT&T’s Edward Whitacre.” (via DCSBN)

Some well-known managers weigh in on the issue:

“It’s time for more walk and less talk. As Charlie Munger puts it, “The CEO has an absolute duty to be an exemplar for the civilization.” Munger isn’t the only leader with that old-fashioned view.”At big-box retailer Best Buy, 33-year company veteran Brad Anderson decided he was making plenty when he became CEO in 2002.

Because he also wanted to shake up the company’s strategy, he decided to hand over his annual option grants to the frontline troops – which he’s done for three years now and plans to continue doing until he steps down. Says Anderson: “I thought it would help internally to be indicative to my people that I was thinking about more than myself.”

(…) Warren Buffett has long believed that “the only cure for better corporate governance is if the small number of very large institutional investors start acting like true owners and pressure managers and boards to do the same”.”