Politicians jump into CEO pay debate

By Martha Graybow

NEW YORK (Reuters) - U.S. presidential candidates from both sides of the aisle are joining union leaders and activist investors attacking lavish U.S. CEO pay, but there is little optimism there will be concrete reform any time soon.

Corporate America's pay practices have been an easy target for angry investors feeling the crunch of the mortgage and credit crises that have triggered write-downs at Wall Street firms, job cuts and stock declines.

They complain that business leaders are enduring little pain themselves, and the message is getting through on the campaign trail.

Among those attracting criticism are ex-Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research, Stock Buzz) Chief Executive Officer Stanley O'Neal, who left under pressure last year with some $161 million in retained stock awards and benefits, and former Citigroup (C.N: Quote, Profile, Research, Stock Buzz) CEO Charles Prince, who received $39.5 million in stock, options, bonus and perks upon departure.

Democratic presidential contenders Barack Obama and Hillary Clinton have spoken out against such hefty CEO pay packages, with Obama the Senate sponsor of a bill that would give public company shareholders an advisory "say-on-pay" vote on top executives' compensation.

Presumptive Republican nominee John McCain recently took his own swipes at the pay of company CEOs at the center of the mortgage market crisis. Sounding a lot like an activist fund manager, the Arizona senator called the compensation of leaders at Bear Stearns Cos Inc BSC.N and Countrywide Financial Corp (CFC.N: Quote, Profile, Research, Stock Buzz) "outrageous" and "unconscionable."

Investor rights advocates say they welcome the spotlight on what they see as out-of-control CEO pay, though few believe that specific new proposals will be put on the table unless the next occupant of the White House puts heavy pressure on companies to be more accountable to stockholders.

The "caterwauling" by politicians is "like summer storms," said Robert Monks, a long-time advocate of good corporate governance. "They come and they go. They flash and they're bright, but they don't last and they don't accomplish anything."