Many companies are quickly discovering that limiting executive pay may be easy, but keeping these limits in place is a whole separate issue. The WSJ ran a story today citing an example of this: Whole Food Markets Inc. The grocer limited compensation for its top executives to a multiple of the average Whole Foods workers' pay. The cap started at eight times average pay when the copany was private in the 80s, but quickly grew to 14 times in the early 90s after the company went public. Last year, the cap hit 19 times average pay. Why the raise? there is a strong conflict between the board and management. The board needs to keep compensation low enough to keep shareholders happy while keeping it high enough to retain quality management. The average pay of a CEO in a large American corporation grew to $11.6 million in 2005, or 411 times the typical US worker. This sets the standards to retain quality executives quite high, which has led to the shareholder rebellion that we have been seeing recently. Whether or not this problem will settle down again remains to be seen; however, it is important to realize the struggle that the board has to put up with before anyone can complain about executive compensation growing too high.

Goodyear Tire & Rubber Co. (NYSE:GT) said today that shareholder resolutions that sought new limits on executive compensation and retirement benefits as well as the adoption of a simple majority vote standard were defeated at the annual meeting. The compensation proposal would have permitted bonus awards to senior executives only when the company's performance exceeded the median of its peer groups. Meanwhile, the retirement benefits proposal had sought to exclude bonus pay from covered compensation under the company's cupplemental executive retirement plan. While Goodyear management had opposed the measures, many shareholders thought that they would still be passed; however, this time larger shareholders vetoed the proposals.

Occidental Petroleum Corporation (NYSE:OXY) revealed in a regulatory filing that its Chairman and CEO, Ray Irani, netted more than $400 million in compensation last year in what is one of the largest single-year payouts in U.S. history. The majority of the payout came from $270 million in options dated 1997 to 2006 that were exercised this year. The executive also received $93 million in stock and dividends from a deferred stock program. Meanwhile, his salary in 2006 was $1.3 million with a cash bonus of $1.4 million and stock option awards amounting to $55 million.

But was the compensation worth it? Well, since the CEO came into office back in December of 1990, the company's stock rose from a mere $9 to share to its current levels of around $50 - a solid 700% gain! While only a few executives have made this much money, clearly this is compensation that is well deserved.

Chief Executive Officer pay finally seems to be slowing down, according to a preliminary survey of CEO compensation released on Monday. The survey, which took proxy data filed through March 23, 2007, covered more than 1,000 large US corporations and found that the median pay for CEOs in 2006 rose only 9.3%. This compares to a 16% rise in 2005 and a 30% rise in 2004. While the pay is still high, it marks the first time since 2002 that CEO pay has risen in only the single digits. Whether or not this is a result of increased disclosure remains to be seen, but it appears that pay is finally moving in the right direction.

GE, Lilly, and SunTrust all failed new SEC rules that require companies to eliminate jargon when explaining how they pay their top executives. According to a study that SEC Chairman Christopher Cox cited in a speech last month, these companies along with 40 others didn't write annual pay reports in "plain english". The study - conducted by Clarity Communications - examined the sentence lengths and types of words used in the companies' financial statements. GE scored a 16.41 on its index, whereas Lilly received a 16.07, and SunTrust received a 17 - the highest possible score. As a basis for comparison, articles in Reader's Digest score right around an eight.

The SEC's executive pay rule overhaul that went into effect in July promised investors that companies would provide "intelligible disclosure that can be understood by a lay reader". While the SEC won't make the companies resubmit their proxy statements, Cox said they would take a tougher stance next year. The Chairman noted, "We have far to go before we can say that legalese and jargon have truly been replaced by plain English." Hopefully over time things will improve to a point where executive compensation finally becomes a transparent disclosure for all investors to review.

The Wall Street Journal released a report questioning whether or not it pays to tell investors extra compensation details. The articles argues that these moves aimed at eliminating investor complaints may backfire by generating increased suspicion over pay packages. Case in point: El Paso. The company offered investors a one-page profile for each of its top officers, featuring a photo, biography, equity grants, and pay highlights. However, the company is still facing criticism from investors who complain that the profile leaves out total compensation while the profiles are "more prominantly placed than they should be". Still, other companies are exceeding the requirements by disclosing specific performance targets for executive bonuses and grants, which is a strategy yet to come under fire from activist investors.

So, are these new executive disclosure rules helpful for the average investor? While they may appear much more helpful on the surface, they tend to hide a multitude of other problems just below. Between negative total pay disclosures, stock option reporting rules, and the variety of presentation formats, the disclosures can be difficult for the average investor to decipher. Ultimately, most investors are simply looking for specific performance targets and accurate total compensation amounts - perhaps the SEC will eventually amend its disclosure rules to make these two variables more apparent than they are now.

A House panel on Wednesday approved legislation written by majority Democrats to give shareholders at public companies a formal say in executive compensation packages. The proposal gives shareholders a chance to cast a nonbinding confidence or no-confidence vote on executive pay plans, allowing them to either ratify or disapprove of them. The move follows a challenge issued by President Bush earlier this year, saying that company managers and directors must step up to their responsibilities. Some are speculating, however, that the move could force more qualified executives out of the public sector and into the much more secretive and high-paying private world. Regardless, this is definitely a situation worth watching closely as it may significantly affect the corporate world in the coming years.

Bob Nardelli, former CEO of Home Depot (NYSE:HD), has been offered a new job at the private equity fund Cerberus Capital even after his questionable tenure at the Home Depot. While the CEO's reputation in the public sector may be forever tarnished, there are apparently many opportunities in the private equity world for experienced managers. Many private equity firms are looking for seasoned managers to run companies in their portfolios, seemingly regardless of their history. Bob Nardelli was ousted from Home Depot late last year after investors balked at his refusal to address their concerns about underperformance, extensive golden parachute and compensation while investors were losing millions, and his inability to effectively deal with the press. Given the secrecy and deep pockets of private equity, perhaps this is where future high-calibur CEOs will be drawn, which will likely end up increasing the amounts that public companies will be forced to pay to keep talent onboard. An interesting development, indeed...