Carl’s Corner Pt. 1: CEO Compensation


Carl Icahn might be a lot of things, but shy isn’t one of them. If there’s something he doesn’t like, expect to hear about. And there’s something he doesn’t like.

We told you a few weeks back if there’s one guy you don’t want to aggravate it’s this one. And the issue that’s stuck in his craw right now is the use of “compensation consultants that soak up million dollar fees” to develop pay packages for CEO’s.

On Fast Money, Icahn tells Dylan Ratigan, “I’ve been talking about this for several years. I don’t want a witch hunt but the examples are reprehensible… you have employees losing their jobs and the boards are just giving and giving to the CEO’s.”

Growing Numbers

And “the use of compensation consultants are growing.” Out of 880 firms surveyed by Wharton 86% use a compensation consultant.

And it appears executive pay is higher at companies where consultants are hired. According to a USC study median CEO compensation is $1.5 million in companies not using consultants, $3.0 million in companies that purchase surveys but do not directly retain consultants, and $4.2 million in companies that retain consultants.

From The Icahn Report

Icahn is so enraged that he’s made this topic the centerpiece on his blog IcahnReport. He writes, "The use of these compensation consultants, which are paid handsomely with shareholder money, gives both boards and CEOs the appearance of legitimacy for their decisions to award massive pay packages to lackluster CEOs, making it appear that these decisions are objective and scientific, which they absolutely are not."

If you’re as outraged as Icahn the way to stop it is to demand change in Washington. And you can do that by signing up for United Shareholders of America on Icahn’s blog.

To hear what Carl Icahn has to say about Delaware's laws of incorporation of for the entire interview please watch the video.

Read More:

> Carl’s Corner from October 15th

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