Pay vs. Performance Disclosure: The Case for Prompt Attention
Even though the Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) requirement on pay versus performance disclosure will not become effective for several months, the subject is expected to take center stage in the upcoming proxy season as universal say-on-pay votes force companies to address an issue at the core of the executive compensation controversy. The risks entailed in silence on the pay-for-performance equation may be amplified if peer companies generally address the point.
This report discusses the issues on which board members should promptly focus their attention.