How much is a CEO worth?
Outrage over executive compensation is now widespread. Linking pay to economic valued added rather than more easily manipulated EBITDA might be an improvement.
| Pay package in the spotlight
Chris Grant, Vodafone
Vodafone's announcement last month of a new pay deal for chief executive Chris Gent raised a predictable investor outcry. Gent's package, shareholders argued, was too much for too little and set a dangerous precedent for patterns of compensation at Vodafone and other blue-chip companies. The news that Gent was paid £2.4 million ($3.5 million) - an increase of almost a third - in a year in which Vodafone recorded a loss of £13.5 billion was difficult for shareholders to swallow. But the fact that he also pocketed a £1.5 million bonus relating to the takeover of Mannesmann in 2000 - the second payment he had received for this deal - leaves a much sourer taste in investors' mouths.
It's easy to see why. There's precious little proof that the acquisition of the German phone company has been a success and plenty of evidence to suggest that it hasn't.