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Conference Board Issues Executive Compensation Best Practice Suggestions (PDF)

6 pages. Excerpt: On September 17, the Conference Board, arguably the world's leading business network, joined the New York Stock Exchange, the NASDAQ, and other regulatory and business organizations in proposing a wide-ranging series of reforms to strengthen corporate compensation practices so as to restore trust in America's corporations and financial markets.

Say-on-Pay Voting Eases Opposition to Board Nominees, According to 2012 Proxy Voting Data

"In director elections, the spike in opposition votes detected in the aftermath of the financial crisis represented the sentiment of the investment community regarding executive compensation.... The more recent trend reversal in opposition votes shows that, while say-on-pay voting practices may still need fine-tuning, they are producing the desired effect of favoring corporate-investor engagement on a matter that is critical to shareholder value creation."

CEO and Outside Director Pay Rises in All Industries According to Annual Compensation Studies

Excerpt: Median total compensation for outside (non-employee) directors of U.S. boards is higher than last year's median in all three major industry sectors covered in The Conference Board's annual study of outside director pay. The study is based on a survey of directors' compensation and board practices in 510 companies. The oversight role of corporate boards is intensifying, resulting in significantly higher demands on board members.

More Companies Filing Supplemental Disclosure to Demonstrate Pay for Performance

"With scrutiny of executive compensation at an all-time high as a result of the implementation of say-on-pay rules, more companies are using alternate definitions of 'pay' to demonstrate their pay-for-performance alignment and to counter negative say-on-pay vote recommendations by proxy advisory firms, according to [a new] report from The Conference Board. The report ... shows an emerging trend in the Russell 3000 Index, where some companies have been supplementing the summary compensation table (SCT) pay used to quantify named executive officer compensation with additional proxy filings detailing other pay measures, such as 'realized' or 'realizable' pay."

Commission Calls for Major Compensation Reforms

Excerpt: The Conference Board's Blue-Ribbon Commission on Public Trust and Private Enterprise today proposed a wide-ranging series of reforms to strengthen corporate compensation practices and help restore trust in America's corporations and capital markets.... This report, the first in a series of three reports, focuses on executive compensation. Subsequent reports will deal with reforms on other areas of corporate governance as well as accounting and auditing issues.

Text of Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: New York State Teamsters Conference Pension and Retirement Fund

"The Board of Trustees of the New York State Teamsters Conference Pension and Retirement Fund, a multiemployer pension plan, has submitted an application to reduce benefits under the plan in accordance with [MPRA]. The purpose of this notice is to announce that the application ... has been published on the Treasury website, and to request public comments on the application from interested parties, including participants and beneficiaries, employee organizations, and contributing employers of the [fund]."

The Five Most Important Things Companies Need to Know and Do About the SEC's Proposed CEO Pay Ratio Rules

"[T]he SEC has provided companies with substantial flexibility ... for determining employee compensation and has allowed the use of simplified compensation measures to identify the company's median employee ... The rules are most inflexible and administratively expensive and burdensome in requiring that all employees of a company and its subsidiaries (broadly defined) be taken into account in identifying the median employee ... During the next 60 days, companies should determine how they would go about gathering and analyzing the information necessary to comply with the rules and should file comments with the SEC discussing the costs and burdens of doing so, using the SEC's 69 requests for comments as a guide."

The Importance of Commenting on the Proposed CEO Pay Ratio Rules

"In [a recent speech, SEC Chair Mary Jo] White recognized the importance of disclosure to investors, but stated that disclosure which strayed beyond the SEC's core purposes could lead to information overload which would harm investors. She also noted that certain Congressional mandates appeared more directed at exerting societal pressures on companies to change their behavior rather than at disclosing financial information to inform investment decisions.... Companies ... should not assume that the final rules could not be more burdensome than the proposed rules and need to support what the SEC has done, as well as suggest improvements."

An Important Company Victory in the Proxy Disclosure Litigation Wars

"A review of the [Superior Court of California] decision ... should give companies substantial comfort that customary CD&A disclosures, absent unusual or bad facts, contain enough information on the material issues relating to executive compensation ... so as not to require more specific and/or insignificant information of the type sought by [this] plaintiff.... The court's decision may not only spell relief for companies in other say-on-pay proxy disclosure lawsuits that are now pending in the courts, but, coupled with recent decisions of other courts refusing to enjoin say-on-pay-votes, the decision could discourage the shareholder-plaintiff's bar from filing additional say-on-pay disclosure suits except in unusual situations." [Gordon v. Symantec Corporation, et al., No. 1-12-CV-231541 (Calif. Sup. Ct., Feb. 22, 2013)]

Disclosure Lessons from the 2013 Proxy Season

"The 2013 proxy season brought several kinds of changes to compensation proxy disclosure practices.... [C]ontinuing the strong trend from the 2012 proxy season and foreshadowing what we expect to see in 2014, many more companies provided more disclosure about the alignment of their pay with the company's performance, with many companies providing more information regarding peer group determinations and changes, as well as utilizing supplemental disclosures of 'realized' or 'realizable' pay to measure such alignment."