In 1967, when every automaker was launching its own version of a “muscle car,” Mercury unveiled the Cougar, a sort of hybrid vehicle positioned between luxury sport and high performance, complete with 351-cubic-inch V-8 and a menacing grill that resembled a set of growling chromed teeth.   My brother and I were instantly captivated by the car and begged my parents to get one. My father said our two-year-old Comet would do just fine, thank you, but he did point to an ad in a magazine that offered large model replicas of the Cougar at what seemed an unbelievable price of $2.75.   We immediately clipped out the order form, emptied our banks and impatiently waited for the next five weeks until our packages arrived. You can probably guess the rest.   In lieu of the flashy model pictured in the magazine, what came was actually a drab, olive-green car constructed of soft plastic, with no interior seats and with what appeared to be oversized roofing nails for axels.   As I recall, my brother cried and I was thisclose to doing so as well.   For once, my father spared us a Carrie Nation-like lecture and simply said, “You boys will find out you usually get what you pay for in life.”   I often recall this adventure when the thorny issue of exorbitant executive pay comes up, and specifically how it measures up to company performance and the million-dollar question -- literally -- of do you really get what you pay for?   No matter how well a company does with regard to appreciation in share prices and market capitalization, I somehow cannot justify or rationalize an executive compensation plan that is one hundred times the amount earned by the president of the United States.   Along those lines, I recently was sent a copy of “Pay Dirt,” a review of executive compensation practices by proxy researcher Glass Lewis & Co.   The Glass Lewis pay-for-performance study examined a total of six indicators of shareholder wealth and business performance, including such areas as changes in stock price over a two-year period and two-year changes in book value per share, as well as analyzing the chief executive’s total compensation and the top five executives’ total compensation.   The study determined that a large number of companies shell out enormous salaries and perks to executives whose performances fell somewhere between mediocre and poor.   Glass Lewis’ research identified 98 executives who were awarded more than $20 million in annual compensation in 2005, with media titan Barry Diller, chairman and CEO of IAC/InterActive Corp., banking the highest comp package in 2005 -- an estimated $85.1 million, a figure that doesn’t include roughly $290 million in exercised stock options.   According to Glass Lewis, companies with the worst pay-for-performance result include advertising and media concern Interpublic Group of Cos., investment conglomerate Morgan Stanley, software publisher Ariba Inc. and Vitesse Semiconductor Corp.   By contrast, the best ones were search engine Google Inc., Caterpillar Inc. and upscale retailer Nordstrom Inc.   And four of last year’s 25 highest-paid chief executives were from companies now under government investigation over past stock-option-granting practices.   And in a textbook example of executive logrolling, Glass Lewis unearthed five directors who sit on the compensation committees of at least two companies that received “F” grades in its pay-for-performance ratings for 2005, while two CEOs at companies that received F grades in pay-for-performance ratings for 2005 also sit on the boards of other companies that received Fs.    Now, realistically, the Glass Lewis report won’t abolish the practice of absurd compensation packages for residents of the executive suite, But hopefully it will prompt investors to take a closer look at companies in which they have placed their money and demonstrate to the CEOs that their salary is not an annuity, and that they must either step up or step down.   And for those that can’t measure up, you can throw in two 1967 Mercury Cougar replicas as part of the severance package.

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