Here's a point that sometimes gets lost in conversations about growing income inequality in America as represented by gargantuan pay packages like Grasso's. Although liberals like me generally support limited government actions like progressive taxation as a way to ameliorate income inequality, most of us understand that there's a limit to how much government can and should do about this.
However, even if you don't believe the government should be involved in arguments over executive pay, there's nothing to prevent shareholders and public figures from trying to shame our nation's plutocrats into more responsible behavior. That's largely what happened here and I applaud it. Incestuous compensation committees will continue to expand executive paychecks far beyond anything that a free market would ever deliver until society simply makes this unacceptable. If people like Grasso are shunned and embarrassed over this kind of legalized thievery often enough, maybe we can put an end to it and redirect some of that money back to shareholders, to whom it properly belongs in the first place.
The advocates of the free market traditionally operate in markets that are anything but free: the tightly-controlled, interlocking circles of influence known as boards of directors. "More responsible behavior" from the people who consistently argue for self-regulation would help their arguments a great deal.
Until then, let's shame and regulate the bastards. The entire concept of public equity and individual shareholders is in danger of falling apart if the plutocrats successfully return to robber-baron tactics.
Kevin is right — the money stolen by maneuvers such as Grasso's properly belongs to shareholders. Shame alone won't get it back.
