The furor over financial executives' pay has spilled across into other industries, as the executives of Royal Dutch Shell and Chesapeake Energy are finding to their own discomfiture.
Shell is suffering from an attempt to push through bonuses despite not reaching its own growth targets. Investors have reacted sharply, with members of a large group publicly criticizing the company. And over at Chesapeake, another investor group is challenging a $112.5 million compensation package for CEO Aubrey McClendon, which makes him the S&P 500's highest-paid executive by the AP's measurement.
With public outrage over the recession riding high, it's no surprise that pay packages are dropping around the country. Mostly, this is happening without too much complaint or comment. But it's notable that energy and financial services, two of the most vilified industries around, contain companies still willing to give big rewards to executives. While plenty of oil companies lowered pay, others, like Exxon, have given bumps this year despite economic conditions.
Here's my mini-analysis of the situation: Having until recently been at the helms of companies far larger and more profitable than those in almost every other industry, it's taking people in financials and oil some time to adjust to their new circumstances. In any compensation battle, of course, there are usually good arguments from both sides, but it should be fairly obvious to company insiders that now is not the time to pay out big rewards.
In the end, execs set on getting bonuses during this period may be digging their own financial grave. At the annual Berkshire Hathaway shareholder meeting, Warren Buffet suggested that institutional investors should band together, adding, "The way to get the big shots to change their behavior is to embarrass them."
At the moment the pressure is a reaction to the bad economic times. But if companies -- especially in badly-regarded fields like energy -- keep giving kickbacks before the markets are on the way back up, applying such pressure could become a matter of cultural habit for both investors and the public. If that happens, the day of big compensation packages will truly be over.