CEO Compensation and Fraud

Schwartzman v. McGavick is not a challenge to excessive executive compensation; it is a challenge to corporate waste and fraud.

Studies have found that there is a connection between the seemingly insatiable greed of corporate CEO’s and the corporate scandals that have plagued our securities markets in recent years. See “Stock Options: Do They Make Bosses Cheat?”

For example, two of the most significant corporate scandals of this millennium can be blamed on CEO’s efforts to increase their own paychecks – the accounting fraud uncovered in the wake of Enron, and the stock option scandal that is unfolding on a daily basis.