Diller derides investor watchdog groups

By Martha Graybow

NEW YORK (Reuters) - IAC/InterActiveCorp. (IACI.O: Quote, Profile, Research, Stock Buzz) Chief Executive Barry Diller, who had an estimated $295 million in compensation last year, said on Monday many corporate governance activists are "birdbrains" who are hurting American business.

The chairman and controlling shareholder of the Internet media conglomerate singled out governance research groups as well as the business page of The New York Times, which he said had a "loony" view of executive pay.

He also said he had no use for the cottage industry of compensation consultants who advise boards of directors.

"I think the whole consultant group should be flushed into the East River and no value loss would ever be seen by man," Diller told the Reuters Media Summit in New York.

Diller ranked as the highest paid CEO in 2005, with 98 percent of his compensation coming from the exercise of stock options he previously had been granted, according to calculations by governance researcher The Corporate Library.

The IAC chief said 97 percent of his compensation over the past 11 years came from one stock option, granted at a time when his company was formed and losing money. Today IAC has a market capitalization close to $10 billion.

Diller said the issue of governance is "completely misunderstood, certainly by the birdbrains that write about it. I mean their reactions to everything are so dim, and I am talking about The Corporate Library and I'm talking about these people that analyze these things and haven't a clue."

The Corporate Library, a Portland, Maine-based research firm, gives IAC's governance a "D," on an "A" to "F"-like academic scale.  Continued...