In the flood of corporate reform unleashed by recent business scandals, one issue has been largely ignored, shareholder activists say: the stratospheric level of executive pay and the nearly impossible task investors face in trying to figure out who is getting how much.
Now that may be changing, according to Securities and Exchange Commission Chairman William H. Donaldson and others who follow the issue.
SEC Chairman William H. Donaldson said corporate boards need to know the full extent of an executive's compensation, including retirement packages.
(Jay Mallin -- Bloomberg News)
|
_____Compensation Report_____
•
The Region's Highest-Paid Executives (The Washington Post, Aug 16, 2004)
•
Pay for XM Executives Modest as Stock Recovered (The Washington Post, Aug 16, 2004)
•
Lucrative Cash Package Came as Fairchild Reported $53.2 Million Loss (The Washington Post, Aug 16, 2004)
•
Board Members, Executives and Family Members Can Still Benefit (The Washington Post, Aug 16, 2004)
•
Expense Issue Draws Mixed Views From Companies (The Washington Post, Aug 16, 2004)
•
Survey Estimates Values of Options, Excludes Exercises (The Washington Post, Aug 16, 2004)
_____Charts_____
•
Top Compensation Packages
•
Top Salaries
•
Superlatives
•
Trends
_____Industries_____
•
Aerospace
•
Biotechnology
•
Information Technology
•
Telecommunications
|
| |
_____Special Report_____
•
Metro Business: Coverage of Washington area businesses and the local economy.
|
| |
|
In a recent interview, Donaldson criticized both the level of executive pay in the United States and the clarity with which businesses disclose compensation to shareholders, especially the lavish retirement packages that often hide in the small print of SEC filings, if they are disclosed at all.
"I believe in people being well paid for really doing something," Donaldson said. "[But] as far as salaries and compensation are concerned, there remains obfuscation about who's being paid what. . . . We have to think through what new rules we want to make things more clear than they are now."
Shareholder groups say it has been over a decade since significant changes were made to compensation disclosure requirements.
In that period, they say, corporate managers have become increasingly adept at camouflaging pay and benefits and reporting the smallest numbers possible in the charts they are required to file with the SEC. The media and investors rely on those filings for summary pay information.
"I started hearing about disclosure changes several years ago," said Carol M. Bowie, director of the corporate governance service at the Investor Responsibility Research Center, which advises institutional investors and others on governance issues.
"But I think the SEC got sidetracked after Enron and now [pay disclosure] is really the last remaining area for reform that has not been addressed," Bowie said, referring to the implosion of energy trader Enron Corp.
Donaldson said in the interview that SEC commissioners and staff are still in the early stages of considering possible new rules that would require greater disclosure -- in plain English -- of the true costs of retirement packages and other forms of executive compensation.
SEC spokesman Matthew Well said it was too soon to speculate about what new disclosure rules might entail. The new rules probably will not be in place until sometime next year at the earliest.
