CEO Stock-Option Bonanza Catches Flak

It's accountability season for corporate America, the time when chief executives face tough questions at annual shareholder meetings.

But what's to complain about, with stocks near historic highs?

Look beneath the surface, and find plenty of tension:

* Concern about executive pay. The market's rise has helped chief executives cash in enormous stock options. Critics say these incentives have ballooned out of proportion.

* An unfinished revolution in corporate governance. Many activist shareholders want boards to be less cozy with the chief executive officers they monitor.

* Social responsibility. Shareholders continue to pressure on issues such as sweatshop labor and environmental practices.

April is the big month for meetings, but these issues have already burst into the open.

Last week, the Rev. Jesse Jackson blasted R.R. Donnelley & Sons, calling the lack of a black or Hispanic director "unacceptable race discrimination." The printing company is fighting age and racial discrimination lawsuits.

At Disney, meanwhile, several large pension funds voted their shares against a new pay package for CEO Michael Eisner at the Feb. 25 meeting.

Stock options for Mr. Eisner and others have soared as investors have urged incentives that align executives' interests with those of shareholders. Now even people who support the concept are scratching their heads.

"I think there should be a level where enough is enough," says Judy Fischer, publisher of Executive Compensation Reports, a newsletter in Springfield, Va.

The newsletter recently tallied the average CEO compensation for 1996 at 100 of America's largest companies. When Eisner was in the mix, the average - with salary, bonus, and stock options - totaled $7.3 million. Without him, it was $3.6 million.

Looking ahead

Monday. Personal income numbers for February are issued.

Tuesday. February leading indicators, a gauge of future economic activity; National Association of Purchasing Management releases its business survey for March, another forecasting tool.

Wednesday. Factory orders for February.

Friday. Job-growth and unemployment data for March.