McDonough urges review of executive pay

Link: Top names lined up to replace Grasso

McDonough waded into the heated debate over executive remuneration during a speech delivered to the National Association of Corporate Directors in Washington yesterday.

He urged directors attending to not only take note of the views of shareholders, but of the ‘anger of the American people’.

‘In an ideal world today every CEO would come to you board members and ask that you re-examine executive compensation, starting with his or her own pay. What made sense two or three years ago may not make sense today,’ he said.

In the event of CEO resigning if pay was ‘rightfully reduced’ McDonough said directors would have the satisfaction of having said to investors and to the public that ‘this is the what the job is worth’.

Last month, the chairman of the New York Stock Exchange, Richard Grasso, resigned following an investor outcry over an enormous compensation package he was due to receive, while Rupert Murdoch’s News Corporation is currently seeking shareholder approval to almost triple the salaries of its eight non-executive directors.

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