More Shareholders Are Just Saying No on Executive Pay

It is often said that social change can’t occur until what was seen as misfortune is seen as injustice. There is a corollary in the financial world. It says change can’t occur until what was seen as immaterial is seen as risky. That’s happening with executive compensation.

Investors are recognizing that excessive pay for chief executive officers does more than shave a few cents off earnings; it also provides important clues about the alignment of executives’ and shareholders’ interests. Misalignment can be very expensive.