Aflac has given shareholders the chance to vote on CEO pay.
Paying heed to investor resentment over executive compensation packages, the Georgia-based insurer on Wednesday became the first major U.S. company to give stockholders a vote–although a non-binding one–on how much the boss should be paid.
The decision by Aflac Inc., made in response to a push by major shareholder groups, comes at a time when the public and the Securities and Exchange Commission are renewing the focus on rising executive compensation.
There are two major questions: whether bosses at large public companies deserve the tens of millions of dollars they sometimes earn, and whether their employers clearly spell out for shareholders exactly what's included in the executives' often-lavish salary, bonus, stock and perquisite packages.
It's the right thing to do, but I doubt it will change base compensation or bonuses. CEO is a stressful risky job, and when the board finds a candidate, I think he or she will get what they ask for. What might change is the golden parachutes that CEOs get, even when they don't perform. That's my major beef with executive compensation. If you make a ton of money for shareholders, it doesn't bother me to pay you millions of dollars a year, but don't ask for that money if you flop.