By Muralikumar Anantharaman
NEW YORK (Reuters) - Leading M&A lawyer Martin Lipton gave a spirited defense of executive pay packages on Monday, insisting that U.S. corporate leaders deserve their multimillion-dollar pay packages.
Lipton defended former NYSE Chairman Richard Grasso's $187.5 million pay package, as well as IAC/InterActiveCorp CEO Barry Diller's 2005 compensation, estimated at close to $300 million, saying both men had helped build great firms.
A founding partner of Wachtell, Lipton, Rosen & Katz and the developer of the "poison pill" takeover defense mechanism, Lipton said such compensation levels were needed to retain top management.
"Most of the high executive compensation has stemmed from the equity incentive plans and there's no way in which they could have created that compensation unless the company prospered and the equity appreciated," Lipton argued at the Reuters Investment Banking Summit in New York.
"What's wrong, in some cases, is that the executive compensation is not related to the performance of the company. But how does a company get and retain top flight management other than by compensating them appropriately," he asked.
Grasso was forced out of the New York Stock Exchange in 2003 amid the public uproar caused by the disclosure of his pay package. Earlier this month, New York Attorney General Eliot Spitzer said in a court filing that Grasso should return $112.2 million in compensation to the Big Board.
Lipton, however, defended Grasso.
"I can't think of anybody who did more for the company or institution that he headed than Dick Grasso," Lipton said. Continued...
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