August 27, 2010

Survey: Few US Companies Well Prepared for Say-on-Pay

When I first saw this press release from Towers Watson regarding how few companies are prepared for say-on-pay, I thought our marketing department had outdone itself since our comprehensive week of executive pay conferences comes up in less than a month – with an aggregate of over 50 panels on executive pay topics. If these conferences don’t help get you prepared, nothing will. You can either register for the three days of the “18th Annual NASPP Conference” (in Chicago) – or the two days of the “5th Annual Proxy Disclosure Conference” & “7th Annual Executive Compensation Conference” (in Chicago or by video webcast) – or a combination of both.

Here are highlights from the Towers Watson press release:

– Only 12% of respondents said they are very well prepared for the say-on-pay legislation, while 46% said they were somewhat prepared. Just under one-fourth of respondents (22%) didn’t know if their companies were ready.

– 69% said they were identifying potential executive pay issues and concerns in advance, while 60% said they were improving their CD&A to better explain the executive pay program’s rationale and appropriateness for the company. In addition, many companies indicated they are engaging with proxy advisors (44%) to discuss areas of concern, meeting with key institutional shareholders (29%) and preparing a formal communication plan (23%).

– More than one-half (59%) of respondents believe that proxy advisory firms have substantial influence on executive pay decision-making processes in U.S. companies. However, 42% said that guidelines established by proxy advisory firms have had no or minimal impact to this point on the design of their executive compensation programs.

Mr. Ponzi’s “Securities Exchange Company”

Here are some thoughts from Keith Bishop of Allen Matkins:

Regarding Broc’s blog about a fake SEC a while back, I’ve always thought it ironic that the SEC has virtually the same name as Charles Ponzi’s company. In 1919, Mr. Ponzi named his company the “Securities Exchange Company” or SEC. Thus, while his own last name has become a synonym for fraudulent pyramid schemes, the name of Ponzi’s company is quite similar to the government agency that now pursues those schemes. Here is an interesting article on the subject.

In another historical confluence of names, some may remember O.P.M. Leasing Services which perpetuated a decade of fraud before collapsing in the early 1980s. “O.P.M.” was an acronym for “Other People’s Money” which also happens to be the title of Justice Louis Brandeis’ well known collection of essays on economic collusion.

Book Review: “Circle of Greed” – The Rise and Fall of Bill Lerach

Recently, Kevin LaCroix provided this review of Bill Lerach’s new book in his “D&O Diary Blog.” By the way, Bill is fresh out of prison and on the book lecture tour…and as noted in Ideoblog, he’s teaching and not feeling the least bit remorseful…

– Broc Romanek