December 15, 2010
Shareholder approval should not be required for executive compensation on the grounds that shareholders are generally out of sync with the day-to-day operations of a corporation. Compensation practices are vital to a corporation's functionality, and it is naive to think that shareholders know better than a corporation's management in this regard. Furthermore, shareholders already have the ability to force out irresponsible managers through a proxy vote. However, shareholders should have some say in the determination of golden parachute packages, as these severance packages add no shareholder value.