The madness, let alone unfairness, of executive pay

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Here’s the intro from this blog by Paul Lee on “The Sense of Fairness” blog:

A billionaire investor rails at the suggestion that someone earning $99 million is paid inappropriately, complaining that in some way the system for raising concerns must be fixed. It’s an article that could probably only appear in one of our financial markets-focused newspapers – in this case it was the FT.

The complaint from Michael Moritz, partner at technology investor Sequoia Capital, is still odder because what it frets about is that 36% of Apple’s shareholders voted against what is usually called the say-on-pay vote. Formally, this is called an ‘Advisory vote to approve executive compensation’, and the word ‘advisory’ matters more than the word ‘approve’. Even if a majority of shareholders had opposed the vote, Tim Cook, Apple’s CEO, would still have been paid: such a vote would have amounted only to a slap on the wrists. A vote against by a minority of the shareholder base amounts to even less than such a slap on the wrists.

And yet Moritz feels this is evidence that the system is broken. While this blogger agrees that the US pay system is indeed broken, that’s from a very different perspective.