Dropping Golden Parachutes Among Pay-Reform Recommendations

The elimination of golden parachutes and overly generous severance packages for top corporate executives were among executive-compensation reform recommendations made recently by the task force on executive compensation of the Conference Board, a business membership and research association.

The recommendations also include:

• Creating a link between pay and performance

• Demonstrating board oversight of executive compensation

• Maintaining transparency with respect to compensation

“Shareholders of American companies and the public deserve to see executive- compensation programs that serve shareholders’ interests and are explained to shareholders in thoughtful dialogue. Implementing the compensation principles we recommend is an important step in restoring the damaged trust in American companies,” Robert E. Denham and Rajiv L. Gupta, task force co-chairs, said in a news release.

“At the same time, we believe compensation committees and boards must be free to develop compensation programs that reflect their shareholders’ interests and fit their companies’ business objectives.”

The full report on the recommendations can be found at http://www.conference-board.org/ectf. 

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