EXECUTIVE PAY - DID BOARDS OVERREACT TO THE 2008 CRASH?

One of the most consequential and publicly visible decisions made by a board of directors is how to pay its CEO and executive team. Bad decisions can have an impact on the image and reputation of both the company and individual members of the board. As a result, compensation committee members have i...

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Veröffentlicht in:	Directors and Boards 2010-01, Vol.34 (4), p.34
Hauptverfasser:	Becker, Irv, Bacher, Jeff
Format:	Artikel
Sprache:	eng
Schlagworte:	Boards of directors Compensation plans Executive compensation Forecasts Pay for performance
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Beschreibung
Zusammenfassung:	One of the most consequential and publicly visible decisions made by a board of directors is how to pay its CEO and executive team. Bad decisions can have an impact on the image and reputation of both the company and individual members of the board. As a result, compensation committee members have increasingly focused on good governance practices and have shifted in the direction of "pay for performance." And then, in 2008 the economy collapsed. Pay for performance now meant that CEO and executive compensation plans were linked to significant declines in both operating results and stock price. Looking forward, it is probable that "shareholder empowerment" will have an impact on committee decisions in 2010 and 2011.
ISSN:	0364-9156