When Lee Iacocca joined Chrysler in 1978, he immediately went to work on engineering the company’s fiscal turnaround. One of his first, and most visible, measures was announcing to shareholders that, to reduce costs, he had lowered his own salary to one dollar. When a shareholder questioned Iacocca about this drastic reduction, he responded, “Don’t worry. I’ll spend it carefully.”
That philosophy—“spend it carefully”—is exactly how public companies should, but often don’t, approach spending shareholder dollars to compensate senior management and directors. In that context, it’s interesting that General Motors Corp. recently took several plays out of Iacocca’s playbook, ...