Beefed up boards

Citation

(2006), "Beefed up boards", Strategic Direction, Vol. 22 No. 1. https://doi.org/10.1108/sd.2006.05622aaf.010

Beefed up boards

Beefed up boards

Jusko JIndustry Week, (USA), Aug 2005 Vol 254 No 8, Start page: 53, No of pages: 3

Purpose – To report on the current state of executive compensation in the USA in the wake of corporate scandals of the late 1990s and early 2000s. Design/methodology/approach – Looks at how emerging boards of directors are changing the dynamic of the board-management relationship, and in the area of executive compensation are scrutinizing CEO performance and questioning the compensation for their services. Addresses a range of issues associated with boards’ increased involvement in the details of compensation plans. mainly as a consequence of the Sarbanes-Oxley Act 2002: the restriction on most personal loans to executives and directors; repayment of bonus or equity compensation profits earned prior to restatement of financial reports due to non-compliance or misconduct; how financial information reaches the board; the administration of deferred compensation plans; investor impact on compensation; and board-CEO relationship. Suggests that while it may be too soon to predict the direction that CEO pay will take under these emerging boards, despite several years of down or flat performance, CEOs continue to be rewarded rather generously. Relates the perception among executive compensation practice directors that the CEOs who have to change are the ones that felt they were the kings and queens of their business and who ran it pretty much the way they wanted to run it. Originality/value – Contributes to the interest in the impact of the Sarbanes-Oxley Act on CEO compensation arrangements.Classification(s): Human Resource Management – Remuneration; Premier Management; HRStyle: ViewpointISSN: 0039-0895

Keywords: Chief executives, Remuneration, Directors