Poll: CEO pay needs reform
The poll found that 58 percent of the 1,110 directors surveyed believe U.S. company boards have trouble effectively controlling CEO compensation and think the situation could be reformed by setting minimum stock ownership guidelines, re-evaluating compensation benchmarks and devising realistic peer group comparisons — concepts that were not included in what ultimately became law in the financial reform bill.
On these issues:
- Eighty-three percent of directors say a key to improving CEO pay policies is to ensure that peer group companies are realistic.
- Eighty-two percent say re-evaluating compensation benchmarks is key.
- Sixty-five percent say setting minimum stock ownership guidelines and/or holding periods is key.
“The corporate governance provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act focused on policies such as ‘say on pay’ and ‘clawbacks,'” said PwC partner Catherine Bromilow in prepared remarks. “Our survey uncovered other areas that may go further to address CEO pay. As compensation issues continue to be a concern, boards will be well-served by closely examining their compensation policies and how their rewards link to company performance.”
Additional information on the survey can be found at: http://www.pwc.com/US/CenterForBoardGovernance.