[NEW YORK] When a company receives criticism about its executive pay practices, a typical defence is to cite a rising stock price as justification of its pay. If total shareholder return is up, the theory goes, stockholders have no right to complain about what might otherwise look like outsize pay at their companies.
While this pay posture is understandable, it raises a question: should a rising stock price inoculate top executives from criticism over their pay? To more and more experts in corporate finance and pay issues, the answer is no.
Aswath Damodaran, a professor of finance at the Stern School of Business at New York University, is among those who think that too many companies rely too heavily...
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