Press Releases

As Economy Improves, Boards Likely to Retain Emphasis on Executive Pay for Performance Link, According to Pearl Meyer & Partners

NEW YORK, February 3, 2011 – New data that points to growing Board confidence in the economy will refocus some executive compensation strategies as hiring improves in 2011, according to compensation consultancy Pearl Meyer & Partners.

The newly released Board Confidence Index, conducted by the National Association of Corporate Directors in collaboration with Pearl Meyer & Partners and Heidrick & Struggles, revealed a 14% gain in Director confidence over the previous quarter driven by improvement in key performance indicators including economic conditions, hiring practices and workforce expansion.

“As competition for high-performing executives intensifies, Boards will face continued investor concern about excessive pay and overall compensation strategy,” said David Swinford, president and CEO of Pearl Meyer & Partners. “At the same time, increased proxy disclosure will reinforce the need to maintain a strong alignment between executive pay and performance.”

Swinford outlined several expected changes in executive program design and governance:

• Although salary increase budgets will rise slightly in 2011, salary growth is likely to remain under 4%
• Eligibility and emphasis on variable pay programs will increase as companies seek to manage fixed salary costs
• Increased shareholder scrutiny, coupled with mandatory option expensing, will drive more targeted use of equity
• Companies will re-evaluate traditional pay strategies to retain and attract talent in light of concerns about excessive pay
   

About Pearl Meyer & Partners
For over twenty years, Pearl Meyer & Partners (www.pearlmeyer.com) has served as a trusted independent advisor to Boards and their senior management in the areas of compensation strategy and program design, compliance and reporting, and committee structure, policies and procedures. The firm provides comprehensive solutions to complex compensation challenges for companies across all industries ranging from the Fortune 500 to smaller private companies and not-for-profits, as well as emerging high-growth companies. These organizations rely on Pearl Meyer & Partners to develop programs that align rewards with long-term business goals to create value for all stakeholders: shareholders, executives, and employees. The firm maintains offices in New York, Atlanta, Boston, Charlotte, Chicago, Houston, Los Angeles and San Jose.