Thursday April 17, 2014

Improving Comp Committees

Three Steven Hall & Partners compensation thought leaders discuss topics of growing concern for directors with NACD Directorship’s Christopher Y. Clark.

Last week, I had the opportunity to speak with several compensation thought leaders on three important topics. My capsulation of these conversations follow.

Christopher Y. Clark

Christopher Y. Clark

Pay, Performance…and ISS
There is nothing hotter than pay for performance measures, as investors are demanding it and companies are struggling with it. Joe Sorrentino of Steven Hall & Partners addressed everything from the wave towards realizable pay to the challenges of the new, more rigorous ISS guidelines, including the two relative measures and the one absolute measure that comprise the core of the aforementioned new methodology. For the full story, please click here.

Shareholder Outreach Revisited
Up-to-date views and valuable insights on shareholder outreach were delivered by Nora McCord of Steven Hall & Partners. Shareholder outreach is nothing new, but it is changing. That is, compensation and governance issues are much more regular agenda items for directors, and the demand for advice on talking points and using the latest communication tools has dramatically risen in the past six months. To learn more, please click here.

Non-Profit Organizations and “Reasonable Pay”
A full not-for-profit compensation outlook for directors was shared with me by Sandra Pace of Steven Hall & Partners. She detailed the myriad of potential penalties from the IRS that not-for-profit boards face in 2012; the common threads of leading governance practices that private company boards have with public company boards – from transparency to the need for well documented processes; the must for great clarity in compensation charters; and the surge in the demand for consulting by not-for profit boards based on all of the above. To get the full picture, please click here.

To close, pay for performance, shareholder outreach and the trials and tribulations of not-for profit boards are part of a compensation committee member’s daily life, and I urge you to view the proceedings, then the obvious: give thought to what directors can do to promote better committee performance and overall transparency/CD&A clarity.

Christopher Y. Clark is publisher of NACD Directorship magazine and Directorship.com.

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