This is the second of a two-part series with corporate governance pioneer Bob Monks. The first part is available here.
Returning to CEO pay, Monks reminded RI of the rationale for founding ISS.
“When we started ISS,” he said, “it was not a red-hot product and we were doing it because we thought it was the right thing and we weren’t going to make any progress on making corporations more accountable until you could empower shareholders and give them a meaningful voice.”
But he did not feel that they had made much progress on, potentially, the most important issue of accountability.
“Nobody has enough of an economic interest in changing the way CEOs are paid. You need someone with a principled objection. And since most fiduciaries have got their lawyers to tell them that making such an objection would be a breach of their fiduciary duty because if a company actually lost a vote on pay there wouldn’t be any benefit to the beneficiaries. And, as…