SEC Knocks Out AFL-CIO Proposal to Prohibit CEOs on Compensation Committees

Eliminating one of the newest tools in the shareholder activist arsenal, the SEC staff has allowed a number of companies to exclude shareholder proposals seeking to prohibit current or former CEOs from serving on compensation committees. The decision comes in response to an AFL-CIO resolution submitted at numerous companies seeking the prohibition on the basis that "the inclusion of CEOs on the ...

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Research & Commentary

Best Practices : Committee Checklist for Assessing Incentives and Risk

Commentary : Boards Need to Monitor Risks More Closely

Commentary : Why Comp Disclosure Must Change

Commentary : Steering Clear Of The Executive Compensation Bog

Latest News

Lack of Bipartisan Agreement Means Exec Comp, Governance Likely Part of Dodd Financial Reform Bill
HR Policy Association, 3/12/2010

New RiskMetrics Ratings System to Rely on Companies for Accuracy
HR Policy Association, 3/12/2010

CEO Bonuses Fell 22 Pct in U.S. in 2009 - Report
Reuters, 3/10/2010

‘Say on Pay’ Would Weaken the Board’s Ability to Link Compensation and Business Strategy

A mandated "say on pay vote" is marketed by proponents as a way to control executive pay and to give shareholders greater oversight of the Board of Directors. In reality, the unintended consequences of say on pay would weaken corporate governance and erode the link between pay and results.

Fast Facts

73 percent of Fortune 100 companies, or the largest U.S. firms based on revenue, said they had clawback policies in 2009 compared with 18 percent in 2006.

Total direct compensation for CFOs fell 4% in 2008.

Of the 76 companies that have tallied their Say on Pay vote only 23, less than a third, have received a majority vote.