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Title: CEO Compensation: A CRT Approach
Date: 13-Mar-2008
Source/Author: Stephen B. Young
Description: At the fulcrum of decision-making in our large corporations is the company’s Chief Executive Officer. Hired to implement the strategic goals and objectives set by the company’s board of directors and to inspire and manage a hierarchy of subordinate company officers and employees, the CEO shoulders important responsibilities for providing vision, direction, and leading through stewardship.

Dear Friends and Colleagues:

Last week in Washington, DC, former CEO's of the mortgage companies and investment banks that created and marketed the derivative securities now depressing world financial markets, were asked by a committee of the House of Representatives to justify their salaries and severance compensation packages.

The challenge to a responsible capitalism of excessive remuneration for a few is especially keen in the United States, but is of relevance generally I think wherever the corporate form is used to do business. Where top managers are not owners but act arbitrarily and extremely self-regarding as owners might do under the law, there is an issue of their ethical responsibilities.

The Caux Round Table asked several senior executives to consider guidelines for CEO and other senior officer compensation within the scope of the CRT Principles for Business. The resulting analysis was presented at the CRT's 2007 Global Dialogue last fall.

For your interest now that the issue is again in the news, I attach a copy of that statement.

Sincerely yours,

Stephen B. Young
Global Executive Director
Caux Round Table

Read full paper "CEO Compensation: A CRT Approach" here (0.03MB  )


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