September 13, 2004
Putting the Heat on the
CalPERS has been widely recognized as a leader in the shareholder activist movement for some time – yet, now both CalPERS and CalSTRS are being pushed by the California State Controller’s office to do even more. The Controller wants these two pension giants to look at executive compensation as a comprehensive program – not just a set of guidelines to use when voting proxies – with a program foundation based on these 4 concepts:
1. Executive compensation policies should link a substantive portion of compensation to achieving key performance targets;
2. Executive compensation policies should be fully transparent to shareholders and should be regularly submitted for shareholder approval;
3. Executive compensation should be evaluated over an appropriate time period (e.g., three to five years), not at just a single point; and
4. Executive contracts should be disclosed in easy-to-understand language in the proxy statement to allow shareholders to evaluate the link between pay and company performance.
We have just added California Deputy Controller Toni Symonds to the panel – “The Institutional Investors’ New Focus on Executive Compensation: What It Means For You” – for our October 20th Major Compensation Conference. Register now!
Where is the Love?
Wilson Chu does it again on the Deal Guys Blog with a nice blog containing some insightful analysis into the advisability of adversarial negotiation tactics that I guess can be best characterized as profane. Wilson’s blog links to the actual voicemail left by an associate that has created quite an Internet buzz. Feel free to provide Wilson with feedback as some already have done…
Section 404 Guidance Manual
We have added a pretty nice 43-page Section 404 guidance manual from Deloitte & Touche to our “Internal Controls” Practice Area.