CEO pay debate spurs new industry group

By Martha Graybow

NEW YORK (Reuters) - With business leaders facing rising scrutiny from shareholders and lawmakers about their compensation, a new organization wants to tell corporate America's side of the executive pay story.

Leaders of the Center on Executive Compensation, an industry-backed group based in Washington, say they want to offer a reasoned view about how to create good pay practices.

The center says its mission is not to blindly defend CEO payouts that have angered investors, but to strengthen the links between pay and performance industrywide while ensuring companies remain competitive.

The media has "rightly" put the spotlight on instances of excessive CEO pay, "but our concern is that paints a picture of corporate America in total," said Richard Floersch, the center's chairman and chief human resources officer at McDonald's Corp (MCD.N: Quote, Profile, Research, Stock Buzz).

"For the vast majority of companies, they are dedicated to a very strong executive compensation program with very strong principles around pay for performance," he said. "Unfortunately, that story doesn't come out when you do have some of these outlier situations."

Activist investors have lashed out over executive payouts they consider too lavish, while members of Congress have publicly scolded some corporate chiefs for receiving outsized pay packages at a time when their companies have been hard hit by the U.S. mortgage crisis.

GRILLED

In March, two ex-Wall Street CEOs, Merrill Lynch & Co Inc's (MER.N: Quote, Profile, Research, Stock Buzz) Stanley O'Neal and Citigroup's (C.N: Quote, Profile, Research, Stock Buzz) Charles Prince, as well as Countrywide Financial Corp CFC.N CEO Angelo Mozilo, got grilled about their pay by a U.S. congressional panel.