Forget legislation, etc. It’s in the interests of a company’s owners (the shareholders) to keep management from paying exorbitant bonuses that ultimately reduces their profits and makes them and the company look like greedy scumbags in this economy.

Goldman Sachs Group Inc (GS.N) was sued on Monday by a large union pension fund that accused the Wall Street investment bank of overpaying its executives.

The International Brotherhood of Electric Workers fund filed the lawsuit in Delaware Chancery Court, seeking to recover money for the company on behalf of other shareholders.

It seeks to stop Goldman from allocating roughly 47 percent of 2009 net revenue as compensation, saying such allocations “vastly overcompensate management and constitute corporate waste.”
[…]
Goldman has been at the center of a public debate over how much banks should pay out in the wake of the 2008 financial crisis, after taking billions of dollars of federal bailout money.

Last week, Goldman said it would cap 2009 compensation expense at $16.2 billion, for a 36 percent compensation ratio, despite posting a record profit.

The bank also said its board rejected several shareholder demands to investigate recent pay awards and recoup excessive pay, while admitting it could face “negative publicity” from media portrayals.