There must be something about summer and surveys. My inbox has been filling up with them even more than usual. Particularly frequent in recent weeks have been studies on executive compensation. Yesterday, Watson Wyatt sent me a press release with the headline “Companies Making Executive Pay Programs More Shareholder Friendly.” Little news there. And an email from the independent (and always helpful) pay consultant Frank Glassner happily points to a Financial Week story detailing an Equilar analysis that says 39% of companies are now using independent pay consultants, up from 35% in 2007. That’s not surprising either, given all the attention paid in Congress to the issue of conflicted human resources consultants, who are hired to set the pay for the very executives who pay the bills on the firms’ other consulting work.
Perhaps most interesting is a press release sent to me by ExecuNet, a network for C-level executives. It says that a survey of 1,098 business leaders shows that executive compensation increased 5.7% during the last year, and is expected to grow an additional 6.2% during the next twelve months. The most interesting number in the release, pulled from yet another survey of search firms and recruiters: The rate of guaranteed severance, according to the survey, went up 19%, from 37% in 2007 to 44% in 2008. If the first survey from ExecuNet is true (and valid—I’m not so sure about surveying executives about their salaries), one has to wonder a little about studies like the one from Watson Wyatt, given the state of the economy and the slipping performance at many corporations today. It’s not exactly shareholder friendly to have average executive pay and benefits increasing when many companies are struggling.
Finally, in other executive pay news, Oracle’s already lavishly rich CEO Larry Ellison nabbed the top spot on AP’s list of highest-paid CEOs. One that caught my attention was #10, Glenn Murphy, CEO of struggling retailer Gap.
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