Executive Salaries: How Much Is Too Much?

April 30, 2012

Liberty Mutual sign. (Flickr/Christopher Schmidt)

Liberty Mutual, based right here in Boston, ranks 82 in the list of Fortune 500 companies. Former CEO Ted Kelly received a $50 million compensation package for the last four years.

But Liberty Mutual isn’t a for-profit company.

Its owned by its policyholders, not shareholders. So, for a company owned by those whom it serves, how right is it for the top level executives to be paid salaries with that many zeros in them? And who oversees this compensation plan?

Guests:

Elizabeth Keating, expert in executive compensation in nonprofit organizations
Jay Lorsch, professor of human relations at Harvard Business School and author of “Back to the Drawing Board: Designing Boards for a Complex World“

Other stories from this show:

Walker B. Carroll

Corporate governance is the greatest oxymoron of our time. Nobody that sits on a board should sit on any other board, nore should they should be working for the company itself (including the CEO). I can’t wait till the officers of many of the state pension funds revolt and start to put their own people on various boards. They vote enough shares to actually challenge management.
Andrea Wilder

Andrea Wilder

I am burned to a crisp over the money paid to Liberty Mutual’s CEO.
Up until now I have happily insured my house and car with Liberty Mutual.
I guess I’ll rethink that.

Now–about the report–should I be getting a check in the mail as LM is a MUTUAL
company, or is this supposed to come as a reduction in my insurance premiums?

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Executive Salaries: How Much Is Too Much?