Execs Divided on Compensation

Article excerpt


OVERALL CONFIDENCE remains at high levels, but chief executives overwhelmingly do not believe that the issue of how they are paid is presented fairly to the general public.

The benchmark CEO Confidence Index jumped 6.6 points in March to 170.1 after pausing in recent months. That represents big gains since the index was launched in October 2002 at 100 (see chart, top).

The gap between Current Confidence and Future Confidence, which are components of overall confidence, remained wide, suggesting CEOs see current conditions as very favorable but that they are worried about longer-term trends. Current Confidence shot up 11.2 points to 193.6 while Future Confidence increased by a mere 3.5 points to 154.2.

A solid 65 percent of 458 email respondents to this month's bonus question said CEO compensation is not well-understood when compared with the money that actors and entertainers make (see chart, middle). They also agreed that very few of them controlled their own compensation levels, debunking a popular myth (see chart, bottom).

But beyond that, there was little accord. Naturally, many CFOs defended the way they are compensated. "CEOs create value, preserve jobs and strengthen communities by providing leadership to organizations," said Jeffrey Evans, CEO of The Will-Burt Company in Orrville, Ohio. "I believe CEOs get a bad rap based on the notable excesses touted in the press. But the majority of executive compensation is certainly much more reasonable."

J. Laws, chief operating officer of Wilbur Curtis in Montebello, Calif. …