As this and other recent articles, we are now into research on what has happened with the new say on pay and pay for performance regulations… I think it is in everyone’s best interest to stay up to date om the latest …… Small business and leadership need-to-know….board of directors
Excerpt……..Escalating CEO pay packages in the last few decades have stirred much debate, culminating in mandated advisory shareholder votes on executive compensation under the Dodd-Frank Act of 2010. The first year of widespread “say-on-pay” votes in the U.S. suggests that investors are taking a conservative approach – about 40 proposals at Russell 3000 index companies received less than majority support from votes cast for and against, and fewer than 200 received support from less than 70 percent. The advent of say on pay in the U.S. has highlighted pay-for-performance as the most significant factor driving investors’ voting decisions on the issue, however.
Doubts about the strength of pay and performance alignment arise from perceptions of “agency problem” conflicts of interest, weak board oversight and aggressive pay benchmarking; from demonstrated abuses such as options backdating; and most recently, from concern that pay practices at some firms likely contributed to the financial meltdown that triggered the latest economic and market malaise
Read full article…via ISS’ New Pay-for-Performance Evaluation Methodology — The Harvard Law School Forum on Corporate Governance and Financial Regulation.
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