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The Corporate Executive, Vol. XXIII, No. 1
January-February 2009

Timely "Best Practice" Disclosures for Your Compensation Discussion and Analysis

The 2009 proxy season promises to be a turning point for Compensation Discussion and Analysis and for executive pay practices in general, as rising public anger over compensation practices will focus all eyes on what companies are doing to address the growing list of concerns. In many cases, companies are grappling with unprecedented financial and economic pressures while, at the same time, their "pay for performance" programs are being fully tested. This confluence of forces occurs against a backdrop of regulatory changes in Washington, as Congress enacts legislation targeting executive compensation at companies accepting bailout funds and will likely soon take up legislation mandating an advisory vote on executive compensation.

In our January-February 2008 issue, we provided examples of "best practice" disclosures that addressed areas of concern raised by the Staff in its review of executive compensation disclosures. We are revisiting some of those examples in light of the credit crisis and economic concerns, as well as recent and expected regulatory efforts. We are also now addressing areas that have become critical concerns in the past few months and must be addressed in upcoming CD&A disclosures. While there is no "one size fits all" approach that can work for your CD&A, we hope that these examples provide critical guidance on analyses that will be expected this proxy season—and beyond.

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