That’s too bad because most corporate directors don’t believe that recent rules changes concerning executive compensation will help them better manage executive compensation, according to a new survey of more than 100 corporate directors at U.S. publicly listed companies conducted by BDO USA last month.
Even worse polarized sunglasses, 91 percent of compensation committee members indicate that Dodd-Frank will not strengthen their oversight of executive compensation.
The survey asked board members a telling question: “Would you like your board to spend more or less time on each of the following topics?”
There is one way CFOs, chief risk officers polarized sunglasses, and heads of internal audit can help their boards increase their effectiveness: by spending more time on strategic risk management and succession planning and less time talking about regulatory issues (i.e., compliance risk) and executive compensation.
The responses indicate that boards:
1) Want to spend more time on risk management and succession planning;
2) Feel they spend just about the right time focusing on industry competitors; and
3) Believe that they spend far too much time on regulatory compliance, evaluations of executive performance and executive compensation.
“Board members’ frustration with Dodd-Frank executive compensation mandates illustrated in these findings is consistent with what we have been hearing from our clients Coach Factory Outlet Online,” said Randy Ramirez Coach Factory Outlet Online, a senior director on compensation in BDO’s corporate governance practice. “Compensation planning is now examined under a microscope on an annual basis, when businesses would benefit from a long-term approach. Pay practices advocated by proxy advisory groups often emphasize immediate pay-for-performance tie-ins, but performance does not always manifest itself on a yearly basis. There needs to be consideration for making smart investments polarized sunglasses, strategic shifts and other moves that do not lead to immediate measurable returns.”
Everybody’s talking about executive compensation – so much so that the drone of the conversation is drowning out more important discussions about risk management and succession planning.
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