Directors Criticize CEO Comp...

The nearly 40 percent of respondents who agreed that the majority of CEOs are overpaid "is a significant increase over prior years' study results," said Edward E. Lawler, III, director of USC's Center for Effective Organizations. Perhaps not surprisingly, "an overwhelming majority [81 percent] favor increasing the link between CEO pay and performance."

Interestingly, the same large proportion believe that a significant power shift is occurring in the boardroom, with 81 percent of directors reporting that CEOs have "less control over their boards" than before. And the majority of directors (84 percent) say that boards are spending more time on "monitoring activities and less on strategy."

Other highlights:

Directors see very few proposed reforms having a significant effect on controlling CEO pay. The main exception is mandatory shareholder approval of compensation programs.

Despite the new SEC disclosure regulations and the fact that they expect to be spending more time addressing CEO compensation issues, 64 percent of directors expect to see continued increases in CEO cash compensation. Fifty-eight percent expect an increase in stock-based compensation. But 85 percent say they expect to see the linkage between compensation and performance increase.

Seventy-five percent of boards now have an independent director who serves as lead or presiding director—a dramatic increase from 49 percent in 2003 and 32 percent in 2001.

Fifty-seven percent of directors say they are more hesitant to serve on other boards. Inside directors are more hesitant than outsiders. And 53 percent limit the number of boards on which CEOs can serve, up from 23 percent in 2001.