Oops! Now the shareholders are getting involved with executive comp

Got this in my morning email from Seeking Alpha,

AIG compensation chief under fire. Activist investors are trying to block the re-election of AIG (AIG) director James F. Orr, chairman of the board compensation committee. Officials representing major union and public pension funds wrote a letter to trustees urging them to unseat Orr for failing to adequately oversee the $165M in retention payments that have sparked so much public outrage in recent weeks. (Read the letter to the trustees (.pdf)) Separately, lawmakers have reportedly asked for copies of confidential reports prepared by a lawyer who has been in charge of monitoring AIG's business practices over the past four years.

Free advice to the Board of Directors of HP, Infoprint, Xerox, Kodak and other public companies
The ground has shifted. The grown ups are in the charge. Executive comp in the States has gotten completely out of control. If it were me, I would focus on this, much sooner, rather than later. If institutional investors are so pressured that they have to demand a sustainable return on their investment, they'll have no one to blame but the Chairman of the Board.

If the CEO of GM can get fired when the biggest institutional investor is the government, it's pretty likely that other institutional investors are going to sooner or later follow their lead. Unless you get ready, this can get pretty nasty.

Meanwhile, given that the M&A people are looking for deals, keep an eye out for the next big bunch of money that comes searching for a way to unlock value in legacy corporations.