Apotheker has never run an American corporation, much less a company as diversified as HP, and according to reports he may have been the board's fourth choice. You want to tell me he couldn't be had for a package topping out at $30 million? How about $15 million, and we'll talk three years from now?
The remedies for the disease of executive elephantiasis are few. Shareholder democracy has obvious limitations. Shareholders who become disaffected with management often vote with their feet rather than with their proxies — they don't stick around to register their disapproval directly. So the "say-on-pay" rule Congress wrote into the recent financial reform act is a good start, but only a start. The rule requires public corporations to give shareholders a nonbinding vote on executive pay at least once every three years, starting next year.
Taxpayers, who subsidize these huge payoffs through the tax deduction corporations take for them, have a remedy: Close the loophole allowing companies to deduct executive compensation in excess of $1 million as long as the overage is tied to executive "performance."
Did I say "loophole"? I meant "six-lane vehicular tunnel." Bogus performance incentives probably rank as the No. 1 executive compensation abuse.
So here's a suggestion: Allow companies to deduct $1 million in executive pay, period. Alternatively, set the limit at a given multiple of a company's average worker salary — say 40 to 1, the ratio prevailing in corporate America in 1980.
Pay your folks an average of $75,000, and you can deduct $1.5 million of your CEO's salary. Anything over that, your shareholders cover the full freight, without the taxpayers' help. (This might even help drive up salaries for the rank and file.)
Barring some similarly dramatic step, here's betting that we haven't seen an end of extravagant executive pay. Occidental Petroleum may hope that Ray Irani is no longer the poster child for the practice, but I haven't taken his picture down from my wall yet.
Michael Hiltzik's column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.
