Many top executives receive multimillion pay packages and earn every penny of it — at least from the standpoint of their shareholders, who reap the benefits of their leadership.
But in a growing number of cases, executives are raking in untold millions even as their companies lag behind industry peers. It comes as no surprise that several executives most complicit in the subprime lending fiasco banked huge paychecks from compliant directors.
The executive pay process is deeply flawed, and shareholders are losing out big time. That’s why aggressive reformers like Connecticut Treasurer Denise L. Nappier are so valuable.
Earlier this month, Nappier, the principal fiduciary of the $26-billion Connecticut Retirement Plans and Trust Funds, announced that four major corporations agreed to provide more detailed disclosures on how they set executive pay. All four were responding to shareholder proposals filed by CRPTF.
Printer R.R. Donnelley & Sons and equipment manufacturer Caterpillar Inc. agreed to disclose details about possible conflicts with their compensation consultants.
Retailer Abercrombie & Fitch and supermarket chain Supervalu Inc. agreed to disclose more about large gaps in pay among their top executives. When CEOs are paid more than three times any other officer, it can be a sign that directors haven’t monitored pay closely.
Nappier has been working on these issues for years, often quietly and behind the scenes. She’s the founding co-chair of the corporate governance committee of the National Association of State Treasurers.
In 2006, she was named by Treasury & Risk Management magazine, a trade pub for CFOs and treasurers, as one of the 100 most influential people in finance. No other state treasurer made the cut. She was included in the “reformer” group with investor Warren Buffett.
Connecticut pension-holders and shareholders generally are fortunate to have Nappier on their side.
