"It's distasteful to pay out very high reward levels when your shareholders are losing money, " explains Laurie Siegel, who spearheaded such limits as head of the board compensation committee at CenturyLink Inc.

WSJ: A Tougher Stand on CEOs With Bad Returns

Options amassed in the secret account were doled out to real employees without the approval of the board's compensation committee, the government contends.

FORBES: Options Charges

He is chairman of the board's management development and compensation committee and also sits on the board's corporate governance committee and its finance committee, which oversees policies for managing credit and risk exposure at the firm.

FORBES: O'Neal Steps Aside At Merrill