What do the most recent corporate disclosures regarding compensation reveal?
Key Findings in this year’s edition include:
- Just as investors’ emphasis on “pay for performance” has led to an increase in the percentage of CEO compensation delivered via stock awards, so investors may encourage companies to extend the vesting and performance measurement periods of such awards.
- While enjoying greater discretion in designing performance-based compensation, compensation committees could find themselves on a collision course with investors if they choose measures that are viewed as de-linking pay from performance.
- Pay-ratio disclosure has not led to the anticipated extensive negative press coverage, but public scrutiny could intensify amid deteriorating economic conditions.
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