May 23, 2007

The Independence of Compensation Consultants

A few weeks ago, Rep. Henry Waxman (Ca.-D) sent letters to a number of compensation consultants seeking information about potential conflicts, ahead of a likely hearing on the topic. Here is an excerpt from a recent NY Times article:

“Members of Congress are looking into the potential conflicts among executive compensation consulting firms that do other lucrative work for the companies whose pay they help devise. The chairman of the House Committee on Oversight and Government Reform has asked the largest companies in the industry for details on their client relationships and the revenues these ties have generated over the last five years.

The companies — Hewitt Associates; Mercer Consulting, which is a unit of Marsh & McLennan; Towers Perrin and Watson Wyatt Worldwide — confirmed yesterday that they had received a letter dated May 8 from Henry A. Waxman, the California Democrat who is chairman of the oversight committee.

Mr. Waxman asked the consulting firms to identify which companies among the nation’s 250 largest they had provided both executive pay consulting and other services for and to disclose total revenues received for each type of service. Mr. Waxman asked that the companies supply the information by May 29.”

Personally, I’m not convinced that these consulting conflicts are “real” since the folks that advise on exec comp are not the same as those that consult on other HR stuff (ie. general workforce pay, retirement and health benefits) within these consulting firms – but perception often can be as important as real conflicts. Of course, as noted in the D&O Diary blog, there can be instances where a consultant can be implicated in some shenanigans…

Executive Compensation Disclosure Proposal: Et Tu, Canada?

Last month, Canadian regulators proposed an overhaul of their executive compensation disclosure rules, including a new CD&A and a total column in their Summary Compensation Table. Similar to last year’s overhaul in the US, the Canadian proposal would be the first update of these rules since 1994. Learn more in’s “International” Practice Area.

Top Trends in Stock Plans for Overseas Employees

Tune in tomorrow for this NASPP webcast – “Top Trends in Stock Plans for Overseas Employees” – and learn:

– Trends in the design and usage of stock options, restricted stock, performance-based awards, and ESPPs for overseas employees
– Changes in stock compensation for overseas employees as a result of 123(R)
– Worldwide participation in ESPPs and changes in these plans post-123(R)
– Policies and procedures for tax withholding on both stock options and restricted stock
– Common practices for monitoring compliance with local laws, grant documentation and employee education, and compliance with data privacy laws and the EU prospectus directive

And just yesterday, the SEC announced a roundtable of five SEC Chairs that will take place today. Not too much in the way of advance notice for this program – and the announcement doesn’t indicate what the topics will be (and this roundtable will convene at 5 pm, well after this morning’s open Commission meeting that includes 8 agenda items). The blog speculates as to what the topics might be…