Recent academic studies have shown dizzying leaps in top executives' salaries, bonuses and stock benefits in recent years, as well as big increases in executive compensation as a percentage of company earnings — money that otherwise would go to shareholders. At the same time, critics of corporate conduct see a disconnect between company officials' pay and their performance.
"It has been a very long time since the (SEC) has revised these rules," agency Chairman Christopher Cox told reporters last week. The tighter rules are needed "to eliminate the surprise of hidden payments" to executives and to ensure that shareholders are fully informed, he said.
Still, some critics of corporate conduct don't believe fuller disclosure of compensation goes far enough because it won't rein in runaway pay and may even create competitive pressure among companies that will push up executive compensation.
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