At today’s annual meeting Qualcomm’s shareholders vote on a pay package for CEO Steve Mollenkopf that has fallen from a reported $60.7 million last year to $10.3 million for 2015. The significantly reduced pay package is a victory for shareholders who voted heavily against last year’s package, as well as for activist investor Jana Partners.This Sunday, the San Diego Union-Tribune’s Dan McSwain wrote an excellent article about Qualcomm and CEO compensation. He quotes from Piketty, Buffet and Keynes as well as noting that Qualcomm’s CEO was one of the 25 most overpaid CEOs mentioned in As You Sow’s recent report.

McSwain does an excellent analysis of Qualcomm’s current troubles and writes, “Critics have a point: It's hard to see how $61 million in 2014 might reflect Mollenkopf's performance. He was a spanking new CEO, and his previous job included running a chip unit that was late to market.”

Yet then he goes on to say, “Here is where simplistic arguments over executive pay break down.”

In writing on compensation I am more often chided for being complex and confusing rather than “simplistic.” I trust McSwain wasn’t referring to our report with its thorough methodology. While many of the points McSwain raised are solid, one borders on simplistic and I want to unpack it a bit.

He wrote, for example, “We note that $30 million of Mollenkopf's 2014 pay came in the form of restricted shares that will vest over five years, to align his incentives with owners.” The time-based restricted shares Mollenkopf received align his incentives more with someone who has been given a gift of shares than with someone who has invested money in the company. Despite the fact that the stock peaked at $82 a share in July 2014 and fell to approximately $52, shares of restricted stock still have plenty of value. Mollenkopf lost nothing. Sure, he doesn’t have as much as was predicted, but there’s little doubt that he’ll accumulate great wealth over his time at Qualcomm whatever the company’s fate. These awards, based only on “continued service” were once fairly common practice, derided by critics as “pay for pulse”

More often these days we see Performance Share Unites (PSUs). Qualcomm did award some performance shares but it as the company notes, no shares were earned under the Fiscal 2013 PSUs because relative TSR was below the payout threshold.

Speaking of alignment with shareholder: it is worth noting that Executive Chairman Paul Jacob’s holdings declined from 2.3 million shares to 1.7 million shares over the past year. Apparently he sold half a million shares between December 2014 and December 2015.

One final quibble with McSwain’s article was the use of the word “cap” in this quote: “Voila, the company in January released its 2016 proxy statement, which caps executive pay at $10 million a year.” To me that work implied a forward looking limit, which does not appear to be the case. Perhaps McSwain meant “this year” instead of “a year.” Wild fluctuations in total disclosed compensation do not reflect limits. When we do the overpaid analysis many of the red flags cover a multiple year period for that reason.

Yet despite these small debate points, I strongly agree with McSwain’s conclusion:

“If the world must be saved from high-priced CEOs, good or bad, the job falls to shareholders. As most stocks reside inside pension and index funds, some experts say such structures encourage detachment and lethargy. But Keynes, the great early 20th century economist and money manager, might say such problems are timeless. In any case, the wealth in those big funds is ultimately held by you and me. This is something to bear in mind the next time a proxy mailer goes straight to the recycle bin.”