Hit with the lucky stick.

• Author: Kristie, James
• Position: EDITOR'S NOTE

WE'RE ALL FAMILIAR with the expression "It's better to be lucky than good" (or some variation thereof). I just heard an appealing new take on that sentiment. A senior executive who was making a sizable philanthropic donation was recounting how he had come to do so. Thanks to a hostile takeover of his company, he now had the wherewithal and motivation to make a meaningful gesture of support to an institution that was important to his success. Beyond all good work in building up a company that had come into the gunsights of a determined buyer, he unabashedly admitted that he "got hit with the lucky stick."

It's that time of the year again when the lucky stick is much in evidence--i.e., compensation reporting season.

How to account for the remuneration numbers that we'll be seeing? One answer is: There is no accounting that justifies some of the numbers. In this corner we typically find the media, certain institutional and activist investors, some veteran executives (in their private anguished moments), and John Q. Public. The other answer is: The numbers are easily accounted for. In that corner we find pay consultants and compensation committee members vouching for their rigorous linking of pay and performance.

Perhaps there is a third answer, which we might as well call the lucky-stick theory. There are two parts to it: First, the megamillionaires who are being created in the executive suite get what they get through a combination of talent, hard work, determination, and other factors (like, yes, luck, since...