U.S. Supreme Court to Hear Case on Executive Pay

The Supreme Court will hear the case this fall, as anger over huge bonuses paid to the executives of failing companies continues to grow...

Last summer, Richard A. Posner, a federal appeals court judge, issued a surprising and prescient dissent... “Executive compensation in large publicly traded firms often is excessive,” he added, “because of the feeble incentives of boards of directors to police compensation.” ..

Here is how Warren Buffett analyzed the situation in his 2003 letter to shareholders: “Year after year, at literally thousands of funds, directors had routinely rehired the incumbent management company,however pathetic its performance had been. Just as routinely, the directors had mindlessly approved fees that in many cases far exceeded those that could have been negotiated.”..

http://www.nytimes.com/2009/08/18/us/18bar.html?ref=us