Comparisons to Peer Groups Hike CEO Pay

by Mark Friedman  on Monday, Oct. 15, 2012 12:00 am  

Charles Elson of the John L. Weinberg Center for Corporate Governance said pay continues to rise for CEOs.

“The real victory would be placing discretion back in the hands of the boards and letting them determine what the appropriate thing to do is,” Ferrere said.

But that might not take place, said Hodgson, of GMI. “Changing the mindset of the compensation committee is not something that’s going to happen anytime soon,” he said. “I can’t see compensation declining.”

Say on Pay

In response to the 2008 financial crisis, the Dodd-Frank Wall Street Reform & Consumer Protection Act of 2010 shook up boardrooms.

One of the initiatives was instituting a “say on pay,” which requires public companies to give shareholders a regular opportunity to vote yes or no on the executive pay package. The vote, however, is nonbinding.

Ruel said the vote had encouraged a dialogue between companies and shareholders over compensation packages. “Companies are forced to respond,” he said.

But he said it hadn’t affected what CEOs were making. “CEO pay is still going up,” Ruel said.



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