Well today the "pay czar" Kenneth Feinstein announced that those companies that received TARP funds will have their base salaries cut by 90% in 2010. This will only impact the top 25 executives at these firms.
Fortunately, the Energy industry did not fall under TARP and is not impacted by these changes. However, President Obama quickly followed the announcement by urging Congress to pass "say on pay" for all publicly traded companies.
So what will happen? More than likely, Congress will pass a non-binding "say on pay" where shareholders will have the opportunity to vote on management pay packages. It will likely be a vote on the Compensation Discussion and Analysis (CD&A) section of the proxy.
HR should begin to review their pay philosophy and practices looking for "red flag" issues. Most energy companies are owned primarily by large institutional investors that may have their "red flag issues" clearly identified, or they will likely subscribe to shareholder services groups like Glass Lewis or Risk Metrics (ISS). Some of these services have requirements such as: disclosing performance measures and targets, listing peer companies, risk evaluation, etc. If you need help reviewing your Executive Compensation prior to "say on pay" being required, feel free to contact me for assistance.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment