For more than a generation, institutional investors have preached the gospel of aligning executive compensation with performance. When results disappointed, we redoubled our efforts. As a result, we have gone from preferring cash to options to performance-vesting options to restricted shares. We have researched vesting periods and grant dates. We have prompted executive pay plans that include salaries, annual incentives, and long-term incentives. We have created a veritable pawn shop of compensation-speak—Golden parachutes, golden coffins, and golden handshakes—and asked proxy voting firms to judge companies by how well they respond.
If, as the aphorism says, insanity is doing the same ...