Barbs and boards.

• Position: Executive compensation - Brief Article

IN EDITING Bruce Ellig's article on executive compensation, titled "Is Everything Old New Again" (page 42), I recalled a fascinating document that crossed my desk in the early 1980s. It was a copy of a speech that Edmund W. Littlefield gave at the Bohemian Grove. At the time that he shared his talk with me in 1983, Mr. Little-field was chairman of the executive committee of Utah International Inc. He has logged service on such boards as General Electric, Chrysler, Hewlett-Packard, Wells Fargo, Del Monte, and Santa Fe Southern Pacific. With tongue ever so lightly planted in cheek, this corporate statesman delivered a volley of zingers at his Grove habitues. A sample, freshly unearthed from the DIRECTORS & BOARDS library:

"While not in the management manuals, here are a few tried and true ways that corporate leaders have developed and refined over the years to guarantee freedom from want.

"First, you appoint an executive compensation committee composed exclusively of outside directors. This allays suspicions from corporate critics, and it is risk-free as long as the members are chosen with care. And, of course, you choose them.

"The next step is to have the compensation committee adopt a resolution stating, in effect, that in order to obtain, retain, and reward superior executive personnel it is the policy of the company to pay compensation above average competitive levels.

"Such a policy will never be successfully challenged. It is a 'motherhood' issue... The logic is unassailable. Good performance deserves above-average recognition. Poor performance requires above-average motivation.

...