September 28, 2005

The Follies of Regulation

In yesterday’s WSJ, there was an interesting opinion column from the former Dean of George Mason University, Henry Manne. Henry believes that executive compensation has gotten out of control (he ain’t alone there) – and he believes new SEC Chair Cox should tackle that issue not by disclosure, but by returning to something like the pre-Williams-Act market for corporate control. He believes the market can be relied upon to check pay excesses if there were a greater ability for management teams to be ousted by hostile takeovers. This seems like a variant of the growing majority vote movement.