Financier Worldwide Roundtable Discussion, Executive Compensation and Regulatory Compliance
Arnstein & Lehr Partner Charles Pautsch recently participated in Financier Worldwide’s roundtable on executive compensation and regulatory compliance. Financier Worldwide indicates that the financial crisis put a spotlight on executive pay. Emerging reforms have companies making efforts to link pay to performance. However, measuring performance can be complex; the difficulty is compounded by a lack of regulatory clarity.
The roundtable participants addressed some key questions about executive pay reform. For instance, when the moderator posed this question: “Reflecting on the evolving playing field for executive compensation, what core advice would you give to companies on developing compensation plans and strategies going forward?”
Mr. Pautsch replied, “It again bears repeating that companies must retain competent, independent advisers and remain alert to the legal and regulatory trends affecting their corporate environment. They should remain focused on the advice rendered annually by ISS and similar organisations in establishing pay programs that are fair, competitive and reflect pay-for-performance. Finally, firms must pay great attention to the voice that their shareholders have been given by law, making the changes that they recommend on an advisory basis, before trouble ensues.”