A report released today by the Corporate Library indicates that the compensation of public company CEOs does not typically drop following a securities class action lawsuit. As reported by Financial Week, the study looked at CEO compensation from 2003 to 2006 among 54 public companies, and found that 40 CEOs saw their salaries, bonuses and benefits increase over the period in which their companies were sued. Bonuses, in particular, did not dip after class-action suits, and actually increased among 30 of the surveyed companies.
The study’s author, Paul Hodgson, stated that he believes “it would be good governance on the board’s part” to examine pay packages after every securities class-action lawsuit.”
