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.
Stephen B. Young
Global Executive Director
Caux Round Table
Read full paper "CEO Compensation: A CRT Approach" here (0.03MB )