IAC/InterActiveCorp chief executive Barry Diller responded to the widespread criticism he received after his pay topped the charts at more than $296 million in 2005, calling his critics "birdbrains". He insists that this criticism is undeserved; after all, the majority of his income (98%) for the year came from exercising options that he had obtained 11 years ago after he took over the then-risky HSN Inc. in St. Petersburg. Since then, he turned the troubled TV shopping network into a $10 billion multimedia conglomorate. Isn't this money well deserved?

He also expressed outrage at many corporate governance groups who automatically penalized his company, most notably the "D" rating that the Corporate Library issued. On that topic, he noted, "I think the whole consultant group should be flushed into the East River and no value loss would ever be seen by man". Moreover, he faced criticism from many in the media, including the New York Times which recently ran a story on his compensation that called him "the laziest man in America". Diller said the issue of governance is "completely misunderstood, certainly by the birdbrains that write about it. I mean their reactions to everything are so dim, and I am talking about The Corporate Library and I'm talking about these people that analyze these things and haven't a clue ... My problem with governance is that it's really hurting American business."

While this is true in some cases, there are many more instances of poor corporate governance. Clearly, many compensation committees failed to prevent the options backdating scandals, ill-defined bonuses (abusing regulation 162m), and countless other instances. Some executives, like Barry Diller, are unfairly targeted; however, perhaps this is a necessary evil in order to protect shareholders in the long run.

Mentioned Companies
IAC/InteractiveCorp (IACI)