Tag Archives | Charles M. Elson
Compensation: The Difference it Makes
Compensation. Most Americans think CEOs of the 500 largest publicly traded corporations are overpaid, even though they think CEOs made less than a tenth of what they actually earn. The Rock Center for Corporate Governance at Stanford University conducted a nationwide survey of 1,202 individuals — representative by gender, race, age, political affiliation, household income, and state residence — to understand public perception of CEO pay levels among the Key takeaways are:
- CEOs are vastly overpaid, according to most Americans
- Most support drastic reductions
- The public is divided on government intervention
Americans and CEO Pay: 2016 Public Perception Survey on CEO Compensation found 74% believe that CEOs are not paid the correct amount relative to the average worker. Only 16% believe that they are.
A brave panel tackled the topic, Compensation: The Difference it Makes, at the Corporate Directors Forums I attended in San Diego last month. Like all Corporate Directors Forums, this one operated under the Chatham House Rule, so you will not find any direct quotes below. These are my notes on Compensation: The Difference it Makes. As such, they include my opinions as well observations made by speakers panelists and others in attendance at the Forum. This is certainly not a transcript. However, I hope even those who attended the Forum will find the post useful, especially my attempt to provide additional context through links and commentary. Continue Reading →
A North American board governance guru, Dr. Richard LeBlanc is put on the hot seat to discuss key steps to creating a great board—and how investors can know how effective their board really is. LeBlanc and host TK Kerstetter talk about board leadership, board assessments, board recruitment and composition.
Kerstetter also quizzes LeBlanc about his book, Inside the Boardroom: How Boards Really Work and the Coming Revolution in Corporate Governance. The two discuss his predictions and whether a corporate governance revolution he projected in 2005 actually transpired. Continue Reading →
Directors&Boards is one of our “stakeholders.” No, that doesn’t mean they own part of us or that we own part of them and it doesn’t mean we always agree with each other. But they are included in our primary reference groups, those who contribute regularly to our “vocabulary of meaning.” The current edition begins to address two topics that need more attention. Continue Reading →
Below are some notes I took during the morning sessions at the Corporate Directors Forum 2014, held on the beautiful campus of the University of San Diego, January 26-28, 2014. This year, I was only able to attend on January 27th. The program was subject to the Chatham House Rule, so there will be little in the way of attribution below but I hope to provide some sense of the discussion. Continue Reading →
Last week the SEC finally proposed rules to require public companies to disclose the pay ratio between their CEO and their employees, as mandated by Dodd-Frank. Companies would have to disclose the ratio between CEO compensation and the median pay of their employees. Update: Comments due December 2nd.
As reported by the WSJ, the ratio of “average” pay jumped from 51.6 in 1981 to 319.7 in 2011, according to data compiled by Kevin Murphy of the University of Southern California. The AFL-CIO sampled S&P 500 firms and claims the ratio went from 42 in 1980 to 380.
In response to complaints from multinationals that tallying pay for workers around the globe would be prohibitively expensive, the SEC’s draft largely leaves estimating and sampling methodology up to individual companies. Continue Reading →
Sorry to be late and abbreviated in getting out my coverage of this great forum. Be sure to check out the Forum’s photo gallery, which contains many more and much better shots than what I took between notes and conversations.
The second panel discussed the growing issue of dual-class stock structures. While there was considerable debate, my sense is that most in the room see the advantages of such structures do not outweigh the disadvantages. I would like to see more discussion in the broader press about these issues when dual-class companies are going public. Maybe the discount would be even steeper. Continue Reading →
There is nothing more controversial than setting the pay of America’s CEOs. 11:45 a.m., March 22, 2013–The John L. Weinberg Center for Corporate Governance at the University of Delaware will host a panel titled “Deemphasizing Peer Groups: What’s Next?” from 9:30 a.m.-11:30 a.m., Thursday, April 11, in Clayton Hall on UD’s Laird Campus.
The program will review the utility of using peer group benchmarking in setting executive compensation with a specific focus on what other factors should be considered by a compensation committee if peer group benchmarking is deemphasized. Continue Reading →
This is the last in my series on the Corporate Directors Forum 2013. See materials, slideshow, Corporate Directors Forum 2013: Bonus Session, and Corporate Directors Forum 2013 – Day 1, Part 1, and Corporate Directors Forum: Day 1, Part 2. The program was subject to the Chatham House Rule, so there will be little in the way of attribution below but I hope to provide some sense of the discussion. I throw in a lot of opinions. Some are those of panelists, some are mine, and some came from the audience. Continue Reading →
Board/Shareholder engagement is a topic receiving increased attention in the US. Many governance organizations and experts have been discussing this topic in an attempt to highlight the issues and challenges that have been expressed by the various constituencies including the directors, institutional shareholders (both US and global), activist shareholders, corporate management, regulators, Continue Reading →
In say-on-pay’s second year, recommendations from proxy advisors have grown in significance for public companies. This week’s Behind The Numbers, from Equilar takes a look at firms that faced daunting negative recommendations by proxy advisors in 2012 and examines what those companies did to defend their pay practices. Continue Reading →
For future reference, I’m bookmarking 2012 Say-on-Pay Votes: Fulfilled Expectations, Though Not Without Surprises by Shirley Westcott of Alliance Advisors, LLC, originally published in the corporate governance newsletter VIPsight.