A growing number of U.S. companies are making executive pay programs and portions of executive benefit plans and severance policies more shareholder friendly.
Examining 2008 proxy statements, Watson Wyatt, a global consulting firm, found 87% of the 75 large public companies analyzed had stock ownership guidelines and requirements for executives (up from 75% in 2007), and 38% had a claw-back policy, which enables companies to recoup incentive compensation in the event the financial measures underlying the incentive plans are restated (up from 23% in 2007).
Other findings included:
- Nearly one in four companies made or are considering changes to severance policies.
- More than 40% amended or are considering amending their change-in-control policies.
- A vast majority of companies set their targeted total pay and individual executive pay elements at or near the 50th percentile, bringing them more in line with their peers.
Source: Watson Wyatt, www.watsonwyatt.com.