The Corporate Library has found that less than a third of companies in the S&P 500 disclosed the actual figures against which executive compensation was measured.
One of the key elements of the changes required by the Securities and Exchange Commission under its new disclosure regulations was for the Compensation Discussion and Analysis (CD&A) to provide more information to shareholders about the processes for setting pay and awarding incentives. While almost all companies now disclose the metrics they use to award cash incentives, the disclosure of targets or goals is found only in the minority.
“While this represents a huge increase over practice in the past,” Paul Hodgson, The Corporate Library’s senior research associate for executive compensation and author of the report, said in a statement. “It is not surprising that the general lack of disclosure in this area was a key focus of the comment letters that the SEC has been sending to companies.”
The survey examines the full range of disclosures made, from the very detailed information provided by companies such as Electronic Data Systems to the complete lack of disclosure provided by the CD&A of property company Leucadia.
The report is based on the latest filings made by companies in the S&P 500, almost all of them in compliance with the new disclosure