Jeff says viz my earlier comments:
"...My POV: the guy added billions in shareholder value, paid out a healthy dividend consistently, expanded the company by adding thousands of jobs and entered new markets, has a 23% operating margin (which in CPG is pretty damn impressive), and generates about $2 billion in free cash every year. Kilts didn't do that all by himself, but the company sure as shit wasn't on autopilot either. Pay the guy, he really did earn it... and don't get into that line of "how much is enough" of argument because we live in a capitalist market system where non-pariticipants don't get to decide how much someone gets paid."
OK. Partly, my earlier comments were facetious; but I do think there is an issue here. Obviously, I agree value creation should be rewarded. If we think about the simple economics of these compensation questions, we've got to begin asking the counterfactual: what kind of results is a firm without a Kilts (ie, with the next best alternative) likely to achieve? If you think that profits (fcf, etc) would be off $153m, then a bonus of that size is justified. But to really answer this, the participants in the deal need to coordinate, etc, you know the score. Now, when there aren't so many shareholders (and other stakeholders), ie, in the entrepreneurial world, coordination costs are low. When you talk about P&G/Gillette, coordination costs are a lot bigger (to say the least).
So the last line is where I disagree, and that was my point: in a deal this size, I'm not sure how easy it is even for participants to really have a say in deciding how the pie is divided up.
But I do take Jeff's point - certainly, here in Europe, where packages at C-level are an order of magnitude lower than in the states, a direct impact on wealth creation has been pretty clearly visible. And you can feel it in the lack of buzz that surrounds innovation as well.