Richard C. Ferlauto (AFSCME) begins Compensation Best Practices Overview with the missive "Compensation is an annual concern." Of course, with pay czar Kenneth Feinberg overseeing the compensation of companies that received TARP funds, with Congress making noises about excessive compensation, and with the citizenry (not to mention shareholders) seemingly on the verge of revolt, one could say that compensation has become a constant and systemic concern. And that makes it a concern for you, as you deal with boards and executives whose decisions and livelihoods are impacted by the latest challenge to how they are paid. The time for some ideas just comes, and with 75 percent of directors and investors agreeing that the "U.S. executive pay model has hurt corporate America's image," that time may be now. So how do companies compensate fairly without paying the piper of public derision and regulatory impingement?
Ferlauto has boiled it all down to ten basic themes that companies can address to ease the pressure and scrutiny:
Ferlauto elaborates on each. Adopting any or all of these practices may or may not erase populist angst over executive pay, but companies that avoid appearing as if no thought goes into compensation will certainly have a leg up in the PR department.
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