An Antidote to Excess


A recent study by Institutional Shareholder Services found CEO succession planning, which many public company boards have adopted over the past three years, to be a key practice in reducing excessive executive and golden parachute payments. The study suggests that without a succession plan in place, a board can become desperate to hire an outsider and is then more willing to offer a “candy store of incentives.”

Index Group

Percentage of companies with a board-approved CEO succession plan, Jan. 2004 Percentage of companies with a board-approved CEO succession plan, Jan. 2007 Percentage- point change
(rounded)
CGQ Universe 1 2% 28% +26
Russell 3000 12% 64% +52
S&P 400 38% 90% +52
S&P 500 65% 96%
+32
S&P 600 20% 82%
+62
Grand Total
14% 54% +39


1. 5,000 public companies tracked by ISS’ Corporate Governance Quotient

Source: Exit Pay: Best Practices in Practice, The ISS Center for Corporate Governance, 2007, www.issproxy.com/pdf/ExitPay2007.pdf.

FEATURE

Maximizing the higher education tax credits

A counterintuitive strategy can save taxes by including otherwise excludable scholarships in gross income.

SPONSORED REPORT

Solving the lease accounting challenge

The challenges of the new lease accounting standard have been pervasive to say the least. In this free, independently-written report, you'll learn effective adoption strategies as well as resources for easing the transition to the new standard.