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Companies Analyzed Pay-for-Performance, Didn’t Tell Shareholders

Joe Mont | October 30, 2014

While nearly 60 percent of public companies have conducted an executive-pay-for-performance analysis, nearly two-thirds of them either did not tell shareholders the results or even disclosed that the analysis took place in their 2014 proxy statements, according to new research from professional services firm Towers Watson.When asked why they did not discuss their pay-for-performance analysis, 76 percent said they were waiting for new Securities and Exchange Commission disclosure rules to be issued; one-third said they were also concerned about setting a precedent that will require similar disclosure in the future.

Towers Watson also found that the majority of respondents analyze pay-for-performance alignment in ways that may be at odds with what the SEC may ultimately require. Among companies that conducted a pay-for-performance analysis, nearly all (96 percent) compared their performance to a company-defined peer group. The...

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