The head of Alcan Inc. spoke out against critics today who attacked compensation packages distributed to executives for accepting a foreign takeover bid. The firm agreed last month to a $38 billion takeover bid from London mining company Rio Tinto, and if the deal goes through CEO Dick Evans will receive more than $50 million in compensation including $37 million in stock options. The executive argued that stock-based compensation aligns executives with shareholders and that criticism of the deal is undue.

"It is totally within the norm. You have to consider that less than a year ago, the market capitalization of Alcan was less than $15-billion, today it is about $35-billion. The purpose of stock-based compensation is, in fact, to align the interests of management and shareholders," Mr. Evans said on a conference call to discuss Alcan's second-quarter financial results. He said it was "naive" to think that corporate managers and boards of directors don't have a duty to act in the best interest of shareholders, including considering takeover offers. And in the end, he is right to a certain degree - stock based compensation packages do align interests but only if they are set at the same level as common shareholders. That is, if he would be holding stock in either situation and honestly feels that a buyout is the best option.