The enormous pay packages that some chief executives receive from public companies are a never-ending source of media scrutiny and shareholder outrage. In the upcoming issue of Fortune, senior editor-at-large Geoffrey Colvin argues that this is causing a brain-drain in public companies, as the valuable executives flee to private companies. In his view, all the CEO compensation kerfluffle is making it very hard for public companies to compete with private companies for the best talent.
So here's where we stand. America's public companies have made such a mess of CEO comp that you might say they have a zero balance in their trust fund: Shareholders won't trust them to make a big-money deal for a CEO even in a case like Calhoun's [the former General Electric executive who is now running a much smaller private firm], where it's perhaps justified.
In the global war for talent, U.S. public companies are blowing their opportunity to hire the world's best managers. That's a historic shift. Shareholders may be paying the price for a very long time.
Going down the talent drain [Fortune on Cnnmoney.com]