Corporate Governance

Many Companies Will Not Disclose Performance Goals

By Fei-Lu Qian

In 2006, the SEC began requiring public companies to provide detail information about their stock option awards and the compensation of their highest paid employees in an effort to give investors more transparency on how executives are compensated. However, based on a new survey conducted by Watson Wyatt, many companies are planning not to comply with the SEC rules in their 2008 proxy statements. Specifically, one third of the companies surveyed are planning not to ?disclose performance goals for their executive pay programs.? In addition, 27% of the companies are not even sure whether they plan to disclose. Moreover, over two-thirds of the companies do not plan to change their approaches in their executive pay programs. As such, 77% of the companies believe that ?the disclosure rules will not have much effect on corporate performance.?

According to the global director of executive compensation consulting at Watson Wyatt, even after the SEC ?put significant pressure on companies to disclose their goals so that shareholders can determine if programs are paying for performance...companies are still struggling with the decision of whether to disclose this information.?

Full post as published by PomTalk on January 23, 2008 (boomark / email).