Investor reaches for reins on executive pay

Some are bigger: Cap the pay of American corporate executives at $500,000 a year.

The 92-year-old inventor, poet and shareholder activist considers such a level of compensation "far above that needed to enjoy an elegant lifestyle," according to his proposal at Merck's annual meeting last month.

"How many planes can you fly on? How many pairs of shoes can you wear?" asks the retired jeweler, who keeps a model of a gadfly in his home office. There he tracks and trades stocks online, managing his retirement money while maintaining enough stock to submit shareholder proposals at dozens of corporations.

Part nest egg and part soapbox, those shares have given Morse the right to put his proposal before investors at Merck & Co., Ford Motor Co., Coca-Cola Co., Exxon Mobil Corp. and others over the last decade. He hasn't won one yet -but he's not giving up.

A half-million dollar pay cap makes sense, he says, particularly compared to the presidential salary.

"He only gets $400,000 and he has to control the whole world," Morse says. "A CEO just worries about one company."

Morse's plan won just 4 percent of shareholder votes at Merck -a standard reception for his proposals -but a network of like-minded investors is having more success with a gentler request: Give shareholders an advisory vote on executive pay.

Analysts say the economic slowdown and new standards of disclosure for executive compensation have contributed to the sudden popularity of the "say-on-pay" advisory vote since 2006, when only half a dozen companies considered the measure.

Paul Hodgson of The Corporate Library, an independent governance research firm, said the state of the economy has made many investors anxious about the escalating pay for top executives. Meanwhile, new regulations require publicly traded companies to more fully disclose the value of stock options and benefits in compensation packages, giving investors a clearer picture of just how much CEOs are getting.