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Gretchen Morgenson had a terrific story at the NY Times last month about Ethan Berman, the CEO of privately-held RiskMetrics, a coporation that helps institutions and corporations assess risk in their investments. The company is owned by its employees and three private equity firms and will generate revenue of $100 million this year.

In the article, Ms. Morgenson writes:

In a remarkable two-page letter to the chairman of his company's compensation committee, this executive requested that he receive no increase in salary, zero stock options, a smaller bonus than last year and a piece of the company's profit-sharing pie equal to that received by all employees.

You can read the letter here.

She goes on:

While Mr. Berman's may not be a household name, his egalitarian executive pay philosophy is worthy of the spotlight. His letter to the board, outlining this philosophy, should be read by anyone who serves on a compensation committee. It should also be memorized by institutional investors, who too often let managers siphon wealth from their pockets.

Mr. Berman writes:

"The banker J. P. Morgan once said that he would never lend money to a company where the highest-paid employee was paid more than 20 times the lowest-paid, as it was in his view unstable," Mr. Berman wrote. "While we are a long way from that threshold, last year I felt I was given an overly generous raise, putting my salary 20 to 40 percent higher than my direct reports. If the proposed salary increases are given to the other managers within the firm, my current salary will be at a level more appropriately above the other key employees in 2006."

And what is Berman's background that makes him think differently than his peers?

A theater major who graduated from Williams College in 1983, he initially moved to Paris to write plays. Several were performed, but he returned to New York in 1985. He started working for a temporary agency and was dispatched to several Wall Street firms. J. P. Morgan hired him permanently, and he began doing risk management work for the bank in 1995.

Damn! You go Berman! Read the entire article and letter about this remarkable man. If we could only get more like-minded folks in the business world, perhaps corporate America might start looking a bit more egalitarian.

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