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Home > Articles & Research > Board Communications > Research Finds CEO Pay not Linked to Performance, According to NACD

Research Finds CEO Pay not Linked to Performance, According to NACD

Many leaders in the corporate United States feel that CEOs are overpaid, relative to their performance, a new study by the National Association of Corporate Directors found.

by Joseph McCafferty | October 16, 2007

Many leaders in the corporate United States feel that CEOs areoverpaid, relative to their performance, a new study by the NationalAssociation of Corporate Directors found. The top three reasons for the high compensation were an absence ofgenuine performance objectives, granting equity awards that have littleconnection to future corporate performance, and a lack of strong negotiating bycompensation committees.

The 2007 NACD Public Company Governance survey, now in its secondyear, was released this weekend, and received reports from 791 individuals,63.2 percent of which serve as outside directors, 33.7 percent of which serveon two or more public company boards, and 8.6 percent of which are CEOs orpresidents.

 

“The Survey report presents the responses of hundreds of ourmembers regarding their board practices, as well as additional data gleanedfrom over 5,000 proxy statements by our friends and colleagues at RiskMetricsGroup,” — Ken Daly, NACD President and CEO

“The Survey report presents the responses of hundreds of ourmembers regarding their board practices, as well as additional data gleanedfrom over 5,000 proxy statements by our friends and colleagues at RiskMetricsGroup,” said NACD President and CEO Ken Daly on the survey.

Among other highlights, the study also found that strategicplanning is the number one issue for the survey’s respondents, followed closelyby corporate performance and CEO succession. What’s more, the average number of full-board meetings decreasedslightly from 6.4 to 5.8 per year, respondents found.

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