USA: Conference Board Executive Remuneration Task Force publishes report, principles and recommendations

Earlier this year, the Conference Board Governance Centre set up a task force on executive remuneration. The task force has this week published a report containing guiding principles and recommendations. In its report the task force observes: 

In retrospect, executive compensation governance and disclosure reforms implemented earlier in the decade may have changed 'too little, too late' and the current public demand for change has effectively eliminated the option for executive pay practices to gradually evolve, as boards explore and test alternatives over time. Regardless of whether the recent executive pay issues are concentrated in the financial services industry, the task force believes that public corporations and directors are at a crossroads with respect to executive compensation. In order to restore trust in the ability of boards of directors to oversee executive compensation, immediate and credible action must be taken. All boards should examine their executive pay practices and take action to ensure that there are strong links between performance and compensation, that the company employs best practices and avoids the controversial practices described in this report absent significant justification, that they demonstrate effective oversight of executive pay, that there is transparency with respect to the executive compensation decision making processes, and that board and shareholder dialogue is available to resolve executive compensation issues".