TheCorporateCounsel.net

Yesterday, the lead article in the Washington Post Business section heavily criticized the increasing gap between pay and performance for CEO pay.

Quoted in the article, Harvard Professor Lucian Bebchuk continues to get high marks for his “Pay for Performance” book, which we recommend as “must” reading for directors to understand the lay of the land today in this critical area. Professor Bebchuk has contributed a number of items to CompensationStandards.com, including these practice pointers on retirement benefits and study on growth of executive pay.

More on Recapture of Incentive Pay

Looks like another reader of the NY Times had a similar reaction to mine after reading last Sunday’s article on the recapture of bonuses (see my blog of 3/15) – below is his letter to the editor:

To the Editor:

The explanations offered by the corporations featured in your article (“Sorry, I’m Keeping the Bonus Anyway,” March 13) for not pursuing the recovery of bonuses paid to executives that turn out to have been improperly paid ring hollow to any experienced commercial litigator. If a contract says that you get a bonus if certain numbers are reached, and they aren’t, you aren’t entitled to the bonus. It makes no difference if it is paid as a result of either mistake or fraud – it has not been earned. And recovering it cannot be noncost effective, unless the lawyers choose to make it so; these are not hard cases, and boards owe it to shareholders to pursue them.

Patrick T. Collins
Short Hills N.J., March 14

Also noteworthy is that Monday, in an interview carried in the USA Today, the Staples’ CEO stated this:

Q: Should boards insist on “clawing back” incentive pay when it turns out a company’s results were overstated?

A: Absolutely. There’s an obligation to claw back ill-gotten gains.

SEC Issues FAQs on XBRL Filing

Yesterday, the SEC issued these FAQs on filing in XBRL in the EDGAR voluntary filing program. It’s unknown which companies are participating in this voluntary program at this time.