Greater detail in proxy statements: Survey

More U.S. companies disclose specific goals used in executive compensation
By Sarah Dobson
||Last Updated: 06/18/2008

More companies in the United States have disclosed the specific goals used in executive compensation plans in 2008 proxies, though roughly one-third still do not provide this information, according to an analysis by Watson Wyatt Worldwide.

More than two-thirds (68 per cent) of the 75 large, publicly traded companies studied disclosed the actual goals on which they based rewards under 2007 annual incentive plans, up from 54 per cent last year.

Additionally, 57 per cent included the goals for long-term incentive plans, compared with 45 per cent.

And slightly more than one-half (56 per cent) provided a detailed description of how total pay earned during 2007 tied to company performance. Even fewer (36 per cent) provided an analysis of how well the company performed versus its industry peers. The Securities Exchange Commission had requested this analysis for 2008.

“Most companies have a very positive pay-for-performance story to share, yet a surprisingly large number are not taking the opportunity to tell it,” said Steve Seelig, executive compensation counsel at Watson Wyatt.

But one-in-10 companies reported making changes to executive pensions and one-quarter of these reduced the potential payments .

“Companies are putting more emphasis on maintaining core pay programs that are well aligned with corporate performance,” said Ira Kay, global director of compensation consulting at Watson Wyatt.

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