Chairman Donaldson Oversteps His Bounds Again

Periodically, Securities and Exchange Commission Chairman William Donaldson worries publicly about executive compensation. As he has done several times in the past, Donaldson recently told the Wall Street Journal (sub. req'd) that the SEC's rules governing executive compensation need to be revised so as to make corporate disclosures in this area more transparent. This time, however, Donaldson went on to suggest the need for substantive regulation.


Chairman Donaldson told the Journal that some officials are paid simply for hitting Wall Street earnings estimates rather than for actually improving their company's long-term performance. Donaldson apparently wants to change that culture by getting corporate pay closer attention to the metrics they use to set executive compensation.

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