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Investment News
June 21, 2009

Directors' role at center of "say on pay" debate

Now that companies receiving Troubled Asset Relief Program funds are required to allow say-on-pay votes, it is only a matter of time before the requirement is expanded to include all public companies, said Susan O'Donnell, managing director in the Southborough, Mass., office of New York executive compensation consulting firm Pearl Meyer & Partners LLC. "Nobody's going to escape this,” Ms. O'Donnell said.

Agenda News
June 16, 2009

Exec Comp Proposals May Mark Huge HR Change at Financial Firms

“The days of an individual producer making a $20 million bonus in a year are going to decline,” said David Swinford, president and CEO of Pearl Meyer Partners, a New York-based executive compensation consultant....I do think that HR will put more emphasis on people who follow rules well as opposed to the super-entrepreneurial types.

CNNMoney
June 10, 2009

Obama administration wants to give investors more say on executive compensation - But will the changes go far enough?

One expert warned, however, that it would be troubling if Feinberg was given too much power. "Should [Feinberg] oversee, supervise and control compensation at these companies? Sure. Should he actually be designing programs and setting individual pay levels? That's concerning." said Susan O'Donnell, managing director at compensation consultancy Pearl Meyer & Partners.

Reuters
June 8, 2009

Treasury to sketch pay rules on Wednesday

"I think we're going to see more [performance] measures on things like liquidity and capital that in the past weren't as big an issue," said Susan O'Donnell, a Boston-based managing director at compensation consultant Pearl Meyer & Partners.

Mercury News
June 6, 2009

What the Boss Makes: Silicon Valley Companies Relying Less on Stock Options

As soon as it became clear that options would carry an expense, they were the first thing compensation committees re-examined, said Jim Heim, managing director in the Boston office of executive compensation consulting firm Pearl Meyer & Partners. "We're nearing a tipping point at tech firms where time-vested restricted shares may make more sense than options," Heim said.

Boston Business Journal
May 15, 2009

Community banks fight an image problem

Susan O’Donnell, a banking consultant and managing director in the Boston office of Pearl Meyer & Partners, agrees with [community bankers'] sentiments regarding guilt by association. "All banks are being painted with the same brush — inappropriately so," she said. "The small community banks were not the drivers of the banking crisis, but they are living with the repercussions."

Treasury & Risk
May 1, 2009

Compensation Cyclone

Indeed, more companies are considering such special retention arrangements as cash contributions made to deferred compensation accounts for CFOs than for other top executives, according to David Swinford, president and CEO of Pearl Meyer & Partners, a New York-based compensation consulting firm.

Recent surveys of company pay practices reveal a spate of salary freezes and, in some cases, reductions. “Companies that were talking about 4% to 5% increases in October are now talking about freezes,” says Pearl Meyer’s Swinford. As financial results continue to suffer, the decline in annual performance bonuses is likely to accelerate, especially in hard-hit industries such as retail and construction.

Associated Press
APril 30, 2009

Changes may be afoot in '09

"The message to companies: Their programs are biased (toward executives) over the long term," said David Swinford, who heads the compensation consulting firm Pearl Meyer & Partners.

Associated Press
APril 29, 2009

CEOs still get lavish perks in tough times

“Companies are looking for stuff that isn’t central to their pay programs,” said David Swinford, chief executive of the compensation consulting firm Pearl Meyer & Partners. “Optics are very critical right now."

HR Magazine
APril 4, 2009

Executive Pay: Perception and Reality

The mix [of long-term incentives] a committee chooses depends on its priorities. For retention, look to time-based restricted stock; for performance, look to options, says Jim Heim, managing director at Pearl Meyer & Partners in Southborough, Mass.

Corporate Secretary
APril 2009

State of pay

‘If you’re a company that’s accepting Troubled Asset Relief Program (TARP) funds, you’re now subject to a set of very, very strict regulations under the American Recovery and Reinvestment Act (ARRA),’ says Deborah Lifshey, a managing director at Pearl Meyer & Partners, an executive compensation consulting firm in New York. Over the past few months, it’s become abundantly clear that government help comes "with a lot of strings attached," she says. Just how onerous the new executive compensation regime will be remains to be seen. "The ARRA has so many holes you could drive a truck through it," laments Lifshey.

Lifshey recommends considering say on pay a year in advance because a vote during the 2010 proxy season will be a referendum on the practices of 2009. In other words, says Lifshey, "as compensation committees make their decisions this year, they have to know the decisions will be under the microscope and may well be subject to a shareholder vote next year."

Charlotte Observer
March 20, 2009

Banks rethink their pay structure

[Some] say that, in a good economy, bankers began to view their bonuses as entitlements instead of as performance pay – another incentive against being prudent.

“People were incented to bet big,” said Laura Hanf, vice president of Pearl Meyer & Partners, a compensation consulting firm with offices in Charlotte. “If you win, you make millions. If you lose, there's always next year, or there's always another job, and by the way, the job probably comes with a six-figure sign-on bonus."

Washington Post
March 19, 2009

In Slump, Firms Move Performance Goalposts - Companies Reward Executives Despite Poor Results

Four in 10 companies surveyed by compensation consultancy Pearl Meyers & Partners last month said they might pay out less than what the executives would have been entitled to based on corporate performance.

Compliance Week
March 17, 2009

Crafting Proxy Language for the Say-on-Pay Vote

“Most of these companies are small community banks, and this is the first time a lot of them have heard of say-on-pay,” says Susan O’Donnell, head of the banking practice at compensation consulting firm Pearl Meyer & Partners. “A lot of the calls I’ve been getting have been, ‘What’s say-on-pay and what does it mean?’”

Most small community banks actually have conservative pay practices, O’Donnell says. “[But] there’s such ire against banks generally, even healthy banks are getting a bad rap. My concern is that they’ll all get tarred with the same view."

Pension & Benefits Daily
March 5, 2009

Bad Economy Injects New Reality into Executives' Pay Expectations

David N. Swinford, president and CEO of Pearl Meyer & Partners, noted that since [a similar survey taken by the firm in November], Directors and executives have moved closer together in their expectations for change. “It is difficult to fix a problem until both parties acknowledge that something is wrong,” he said. “This suggests a positive coming together of minds on the need for significant change."

Compliance Week
March 4, 2009

Firms Mull Salary Freezes, Bonus Cuts, More

The market turmoil and increased public scrutiny of executive pay continue to impact companies’ compensation decisions, with more companies mulling freezing salaries, lowering bonus payouts, and cutting stock-based awards, according to the latest survey by compensation consultancy Pearl Meyer & Partners. Among 436 board members, executives, and human resources professionals surveyed in February, 90 percent say the troubled economy will color their compensation decisions over the next six months. The poll, Executive Pay in the New Economy, updates a similar study of 410 participants conducted by Pearl Meyer & Partners last November.

Boards and management are increasingly moving to reexamine executive pay design even in industries not directly affected by the executive pay restrictions imposed by Treasury on companies that have taken federal TARP funds, says David Swinford, president and CEO of Pearl Meyer & Partners.

Directorship
March 3, 2009

More Companies Making Cuts to Pay Plans

Fully 90% of respondents in February [to the Executive Pay in the New Economy survey series] said the troubled economy will color their compensation decisions over the next six months. “That suggests that in contrast with the sustained economic and executive pay growth of the previous decade, many Boards realize they will have to better manage executives' expectations about their likely career earnings,” said David N. Swinford, president and CEO of Pearl Meyer & Partners.

Financial Week
March 2, 2009

Hot trend: Companies freezing executive pay

“It is difficult for companies to justify executive salary increases when growing numbers of employees face layoffs and more firms are struggling just to survive,” said David N. Swinford, president and CEO of Pearl Meyer & Partners, in a press release.

Boards also are less willing to cushion executives from plummeting market prices...“Boards are rejecting the argument that larger grants are needed in 2009 to replace the retention ‘glue’ provided by past stock awards that have lost enormous value in the market downturn,” Swinford said.

Compliance Week
February 24, 2009

Confusion Reigns Over Pay Restrictions

Susan O’Donnell, a managing director at compensation consulting firm Pearl Meyer & Partners says a troubling aspect is that the law “takes a broad-brush approach and puts all of the banks in the same group,” unlike the Treasury rules, which differentiated between healthy firms and those that need “extraordinary assistance.”

The restrictions essentially “eliminate pay for performance and eliminate the ability of compensation committees to make pay decisions other than base pay,” O’Donnell says. Under the new restrictions, she says, “Even small, local community banks with conservative pay programs will see pay cuts."

Reuters
February 9, 2009

Comp and circumstances changed, bankers may move on

Jannice Koors, managing director at pay consultant Pearl Meyer & Partners, said banks have to make sure that even for the executives they keep, pay is not slashed too much. “It is a ‘deferred brain drain’ risk,” she said. “The minute this market turns around, and those executives’ phones start to ring with other opportunities, they will be more willing to listen."

Pension & Benefits Daily
February 6, 2009

Practitioners Critique Treasury TARP Rules Designed to Curb Excessive Executive Pay

"It's entirely reasonable to expect some sort of restraint with respect to executive compensation when you take government funds," Mark Rosen, managing director in the Charlotte, N.C. office of the compensation consulting firm Pearl Meyer & Partners. However, Rosen was critical of Treasury's policies, especially a proposed rule that would permit restricted stock for TARP executives to vest only after the government had been repaid the money it invested. Treasury effectively established a single performance measure to trigger the vesting of restricted stock, "which is thou shalt repay the government as soon as possible," Rosen said. "Is that in the best interest of creating jobs? Is that in the best interest of loaning money and doing the things that banks are supposed to be doing?"

New York Post
February 5, 2009

On Wall Street: Who Could Live on $500K?

Mark Rosen of Pearl Meyer & Partners, a compensation consulting firm, said the move [to cap salaries for executives of companies receiving federal rescue money] has pros and cons. "I personally think it's reasonable to put some sort of restraint on executive compensation when you use government money," Rosen said.

Reuters
February 4, 2009

Wall Street faces new frontier on bonuses, perks

Jannice Koors, managing director at pay consultant Pearl Meyer & Partners, said banks have to make sure that even for the executives they keep, pay is not slashed too much.

"It is a 'deferred brain drain' risk," she said. "The minute this market turns around, and those executives' phones start to ring with other opportunities, they will be more willing to listen," she said.

Directorship
February 3, 2009

Directors' Pay: The Median Is the Message

"Being in the middle is the safe ground," says Jannice Koors, Pearl Meyer & Partners managing partner. "Companies can attract and retain highly qualified directors and not worry about being accused of overpaying. Meanwhile, companies in the middle are perceived as not paying so much that their directors have lost the veneer of independence."

Two places where there were double-digit increases this year over last, notes Koors, are at opposite ends of the spectrum: the largest and smallest companies on the Top 200. This year's analysis underscores how the competition for director talent among the largest Top 200 companies has pushed up the rate of compensation. "The smaller companies— in the wake of SOX and the increased exposure to directors as a result—are still playing catch-up to what is a minimum level of pay required for the agony for being on any public company board today," Koors says.

CFO
February 1, 2009

Losing It - Holding a Personal Financial Stake in their Companies Has Cost Many Managers a Bundle

"If the stock price is down 30 to 40 percent, even if it's a market issue and you're hitting internal targets," says compensation consultant Jim Heim at Pearl Meyer & Partners, "there's a perception of misalignment between shareholders and executives" if executives reap rewards.

Compliance Week
January 27, 2009

Reversal of Fortunes: CEO Salaries Now Squeezed

Salary freezes are on the table at hundreds of companies, according to the results of a November survey conducted by compensation consulting firm Pearl Meyer & Partners... Moreover, 36 percent of respondents to the survey said they plan to pay a bonus that’s “below formula”—that is, less than what executives would have earned based on achievement against the plan’s stated objectives. “Compensation committees aren’t just relying on poor performance to produce lower results,” says Jim Heim, a managing director in Pearl Meyer & Partners’ Boston office. “In some cases, they’re giving executives a haircut on top of an already small bonus based on performance."

Agenda
January 12, 2009

Sector Outlook: Energy Boards Seek New Comp Incentives

Utilities may find it easier to develop incentive pay packages because of their relatively stable revenue flows. Regulatory agencies set utility rates on a 12-month or longer time period, which can include fuel price pass-alongs, facilitating long-term incentive planning. “Utilities have been more protected from the Wall Street slump,” says Jim Heim of Pearl Meyer & Partners. "There isn’t the same level of panic [as in other sectors].

Reuters
January 6, 2009

Bank of America CEO skips bonus

As long as banks are getting government support, it will be harder for them to pay out large bonuses to senior executives, said Jannice Koors, managing director at compensation consultancy Pearl Meyer & Partners. "There's a recognition that paying large bonuses now does not look good," Koors said.

Midwest CEO
January 2009

Lessons Learned: The Play on Pay

Pearl Meyer & Partners CEO David Swinford was the focus of a Q&A on how the economic downturn will affect compensation programs, including why some executives aren't complaining about the lack of a bonus in 2008.

Nobody wants to be the poster child for greed. There are a lot of executives out there who recognize that they’re in this for the long haul, and the last thing they want to do is damage relationships with the board or with shareholders when times are tough for everybody.

Directorship
December 2008 / January 2009

The Median is the Message - Director Compensation at Large-cap Companies is Beginning to Moderate

The Top 200 companies tend to be leading indicators and thus provide relevant guidance for all comp committees, according to Jannice Koors, PM&P managing director. Contributing to the middling trend is an increasing fear of being an outlier. “Being in the middle is the safe ground,” Koors says. “Companies can attract and retain highly qualified directors and not worry about being accused of overpaying. Meanwhile, companies in the middle are perceived as not paying so much that their directors have lost the veneer of independence.”

“When you look at the increase in compensation, it is coming in the form of equity rather than cash, and if I’m a shareholder, I probably think that’s a good thing,” says Koors...Boards among the Top 200 also seem to have found a pay mix that is working. It consists of about 60 percent equity and 40 percent cash. “I think companies today would have a very tough time coming up with a viable rationale why it made sense to move away from a pay structure that is at least 50 percent equity. That would be a very tough sell," Koors explains.

Agenda
December 22, 2008

Boards Prepare for Say-on-Pay Era

“If there’s a silver lining to all of this, it’s [that] the IR community and boards are more willing to talk,” says Deborah Lifshey, managing director of Pearl Meyer & Partners....A congressional say-on-pay bill will probably not specify how boards should phrase the policy in their proxy statements, says Lifshey. The House bill last year was broadly worded, and it would be harder to pass a bill that was too specific.

Agenda
December 8, 2008

Where Have All the Good Board Candidates Gone?

Fiduciary responsibilities, and the increasing workload they entail, can be intimidating. “We’re living in the age of transparency and heightened disclosure,” says Jim Heim, managing director of Pearl Meyer & Partners.

Directorship
December 1, 2008

The Median is the Message - Director Compensation at Large-Cap Companies is Beginning to Moderate

"When you look at the increase in compensation, it is coming in the form of equity rather than cash, and if I'm a shareholder, I probably think that's a good thing," says Jannice Koors, Pearl Meyer & Partners managing director.... "I think companies today would have a very tough time coming up with a viable rationale why it made sense to move away from a pay structure that is at least 50 percent equity. That would be a very tough sell."

Reuters
November 20, 2008

Downturn Seen Hurting Executive Pay in 2009, Too

"Boards are more cognizant of the optics of what they are doing," said Jim Heim, Managing Director of Pearl Meyer & Partners, who helped compile the report [on the expected impact of the economic downturn on executive compensation programs]. "Extraordinary measures need to be taken."

CNNMoney
November 4, 2008

Wall Street bonus backlash brewing

"You've got to pay the army that is generating the results for the organization - there is no question about that," said Dave Swinford, president and CEO of the compensation consulting firm Pearl Meyer & Partners..."I think all of the most senior executives are thinking hard about what the right thing is for the organization and frankly for themselves in the long run," said Swinford.

Directorship
OCTOber 17, 2008

Ask the Expert: Executive Compensation

Pearl Meyer & Partners President David Swinford participated in a Q&A on the impact of the current economic crisis on executive pay programs.

"Directors are refocusing on a few specific areas. Many are looking at how to deal with pay for underperformance and how to properly compensate top executives until their companies can make money again. Another area is retention. Right now, there is less competition for executive talent across many industries, so a company that wants to invest ahead of the turn of the cycle can effectively recruit...Directors [also] need to get a better handle on risk – not just how much risk the incentive plan encourages, but how much risk the company has actually taken on. It’s quite obvious that a lot of directors, and not only at financial services firms, didn’t fully understand their organizations’ level of risk."

BNA - Corporate Accountability Report
OCTOber 17, 2008

Consultants Tell Comp Committees to Plan Ahead in Light of New Regs

"The changes brought by this act are so significant that compensation committees, whether they seek aid under EESA or not, are advised to remain wary for any additional guidelines Congress may release,’’ Deborah Lifshey, managing director at Pearl Meyer & Partners, told BNA.

‘‘The developments we are seeing strongly indicate that Congress may try to pass measures similar to those of the EESA that would apply to all firms in general in the near future,’’ she added.

The newly released standards give compensation committees of companies seeking federal aid much more responsibility, according to Lifshey. Lifshey further noted that the EESA might also affect the operations of companies on the margin of seeking federal aid.

‘‘If a company contemplates seeking relief from the government, it will want to start preparing by revising its compensation structure to fit federal guidelines as soon as it can. With the new guidelines, there is a specific list of requirements that a firm must satisfy in order to qualify for aid,’’ she explained.

Lifshey said that although currently compensation committees for companies not seeking aid are not affected by the EESA’s measures, those committees have a compelling reason to keep up with new guidelines as they are released, for these changes could very well be a harbinger of what other legislation is to come.

Houston Business Journal
October 3, 2008

Health Care Competes for Talent with a Full Arsenal of "Weapons"

According to Ed McGaughey, managing director of Pearl Meyer & Partners, a national compensation consulting firm, approximately one-third of integrated institutions provide long-term compensation that emulates stock options or other forms of equity found in the for-profit sector. Short-term bonuses are becoming more competitive and retention bonuses are emerging as a tool to minimize the risk of losing high potential individuals.

Corporate Board Member
September/October 2008

The Comp Committee Takes Its Turn on the Barbie

According to David Swinford, CEO of Pearl Meyer & Partners, a New York City-based compensation consulting firm that helps comp committees put pay proposals together, boards are demanding more of these committees. “Increasingly they’re insisting that comp committees justify their pay recommendations,” he says. Time was when the meetings at which the chairman of the committee presented his or her report on pay proposals tended to be pretty perfunctory. There might be a question or two, but the recommendation was generally accepted without rigorous or extensive scrutiny. Now those executive sessions are more exacting. Boards are putting pressure on the committee members to explain how and why they’ve come up with certain compensation proposals— proposals that could become the subject of external debate or perhaps litigation. “We have to convince them of our recommendations,” says Swinford, “and they have to be able to convince the board.”

Bank Director Magazine
Third quarter 2008

Behind the Veil: How Well is Compensation Disclosure Working?

In early April, New York-based compensation consulting firm Pearl Meyer & Partners issued a study of the effects of the SEC disclosure rule on 124 public companies, along with a press release bearing the telling headline, “More Proxy Disclosure Won’t Mean Less Pay.” Essentially, the consultancy found that the SEC’s rules were hastening the trend toward linking compensation with corporate performance and shareholder value. Yet the disclosure policies were not “dramatically transforming the compensation landscape.”

Despite the added pages of charts, extra verbiage, and promises of “plain English,” the chore of making sense of the proxy reports has actually gotten harder. “The SEC’s goal was for the proxy statements to be clearer,” says Susan O’Donnell, a managing director in Pearl Meyer’s Boston office and a banking industry compensation expert. “But while there is more information, it’s just not easy for people to get a handle on what it all means. It really requires further analysis.”

St. Louis Post-Dispatch
September 28, 2008

Director pay adds up

Peter Lupo, managing director of Pearl Meyer & Partners, a New York-based compensation consulting firm, agrees that the way directors' stock-based pay is reported can be confusing. If a company provides information about the amount of stock given and its vesting schedule, you can calculate the "consulting value" of the stock. However, assigning a value could be arbitrary if the company doesn't tell you when the director got it.

Financier Worldwide
September 2008

Developing an effective executive compensation strategy

"Boards have become more sensitive to the investor and public relations ramifications of their pay decisions," says David Swinford, president and chief executive of Pearl Meyer & Partners.

A sound reward structure should balance labour market competitiveness, short term business objectives and long term shareholder gains, according to Mr. Swinford. "Everyone, including executives and shareholders, should expect to make less money in difficult economic times and more money in good times. It is as inappropriate for executives to expect to be completely protected from the impact of a recession as it is for shareholders to grouse about how much money executives make in an up-market," he says. He adds that executives will be fairly rewarded if the company offers a competitive base salary, pays an executive for accomplishing key objectives in the short term and ties the long term portion of the package to shareholder returns. Even when there are some short term anomalies, such as unusual market situations, the pay will remain fair. This helps a company to hold on to key personnel in difficult times, when job security may be at its lowest and head hunters are trying to tempt talented individuals away.

Equity compensation is taking up a larger portion of total pay packages so that executive benefits are tied to shareholder gains and losses. "The critical issue here is over what time frame executive compensation must be shown to positively impact shareholder returns," observes Mr. Swinford. "One year is clearly too short a timeframe. The right period is more likely five to 10 years, depending upon the industry's business and investment cycles. Many, in fact most, shareholders do not stay invested in one particular company that long," he adds.

Read Full Report >>>

CFO.com
August 20, 2008

Amid the Din over Exec Pay, Companies Hold the Line

"In the pay levels themselves, there wasn't a lot of big news. It was really about the focus on the CD&A," says Jannice Koors, managing director at Pearl Meyer & Partners.

Atlanta Business Review
August 18, 2008

Special Report: Successful Corporate Counsels Reap Reward

Because the compensation of general counsel can exceed what law firms pay partners, attorneys are more likely to move from law firms to corporate jobs than the other way around, said Atlanta-based executive compensation consultant Joe Mallin of Pearl Meyer & Partners. “Over time there is a steady stream of people that leave law firms and go to the corporate world,” he said. “That’s true in a lot of professions. ... It’s not unusual to read the bio of a CFO [chief financial officer] or a controller or a treasurer and find that they have a Big Four accounting background."

Washington Post
July 28, 2008

Perks Still in Play But Sometimes Are Less Lavish

"You should make your relocation policy such that it makes people neutral. They shouldn't be better off, but they shouldn't be worse off either," said Jannice Koors, a managing director at compensation consulting firm Pearl Meyer & Partners. "A company should be able to relocate an executive without the executive having to pay a penalty for it."

Reuters
July 2, 2008

Lehman to pay employees more in stock

Companies typically pay out bonuses in stock to help retain employees, and to give executives an incentive to work to boost the share price, said Jannice Koors, managing director and compensation consultant at Pearl Meyer & Partners in Chicago. "It creates a stronger link between the fortunes of executives and the fortunes of shareholders," Koors said.

Directorship
June/July 2008

Has the Pendulum Swung Too Far?

Matt Stinner, managing director of the Boston office of executive compensation consulting firm Pearl Meyer & Partners, said the use of peer groups is "extraordinarily difficult for some and easy for others. The strongest correlation is revenue, but you’ve also got to consider international complexity, market cap, growth rates, gross margins—and the more filters you add, the likelier you are to run out of companies." Stinner suggests defining peers based on relative performance: "That way, companies can come in and out of the peer group, depending on their performance relative to your own."

Crain's Detroit Business
June 30, 2008

HR must play key role in executive pay, insiders say

“The SEC doesn't always buy the confidential treatment-competitive harm argument,” said Deborah Lifshey, a Managing Director at Pearl Meyer & Partners. The unfortunate result, Lifshey said, is many companies are changing their plans so executive compensation is determined on a more subjective basis rather than solely on objective performance goals that companies have to disclose. “Companies are making it so the performance goals they set are easy to achieve, but then the committee has discretion on how it determines the rest of the executives' pay,” she says.

HR executives can help their companies determine which performance metrics to use, but it can be tricky in the new environment, Lifshey said. “Maybe there is a goal that doesn't rise to the competitive-harm standard, but the company still doesn't want to disclose it for competitive purposes,” she said. “There is going to be a tricky balance between getting the right performance measures from a business perspective and finding metrics that you want to disclose.”

Long Island Business News
June 27, 2008

Salaries down, total compensation up for area executives

Pearl Meyer & Partners, a compensation consulting firm headquartered in New York City, said boards need to be wary of post-separation pay packages that are generous to former executives – at shareholders’ expense.

“Many companies are reconsidering whether cash severance for executives is routinely necessary or even appropriate,” according to Pearl Meyers & Partners.

The Cincinnati Enquirer
June 21, 2008

Who has say on pay?

Jannice Koors, managing director for the Chicago office of compensation consulting firm Pearl Meyers & Partners, says executives should have a significant portion of pay tied up in company stock.

"Obviously for a publicly traded company the ultimate definition value of shareholder value is stock price, so it is absolutely critical some portion of the executive pay package is directly linked to creation of value for shareholders," Koors says....Still, she acknowledges there remains "a lot of noise" and lack of clarity around determining [total pay]. "Everyone wants to think that their CEO is above average, to paraphrase Garrison Keillor," says Koors. "Well, everyone can't get paid above the average without pushing the pay up everywhere. You've got to remember that the executive suite at a major publicly traded company features some of the most competitive egos you will run across, so that will always be a part of it."

Milwaukee Journal Sentinel
June 18, 2008

Exec pay parallels company earnings - Compensation found tied to performance

A recent study by compensation consultants Pearl Meyer & Partners reported that corporate compensation committees appear to be responding to concerns that executive incentives need to be more in tune with shareholder interests.

From a cross-section of 50 companies filing proxies early this year, Pearl Meyer found that 22% had provisions to take back performance-related bonuses in the later event of restated earnings. That was up from 18% in the previous year. Also, 70% had guidelines for executive stock ownership, up from 64% the year before.

Corporate Board Member
June 10, 2008

Boardroom Perspective with James V. Hughes

As part of a wide-ranging interview with TK Kerstetter, President & CEO of Corporate Board Member, Pearl Meyer & Partners Senior Managing Director Jim Hughes discussed how corporate directors can best improve their performance.

Much of the criticism leveled at compensation committee oversight is traceable to a perception of the lack of the kind of everyday processes that foster good decision-making by Directors...A second key element of good process is communicating to management, well in advance of meetings, what information the Committee needs, and when, in order to do its job....Finally, outside advisors should get involved early in the decision-making process, so they can provide guidance within a broad context of programs and suggest a change of course when needed.

Agenda
June 2, 2008

Boards Alter Performance Goals to Duck Disclosure

The study by compensation consultants Pearl Meyer & Partners showed that a little more than one quarter, or 25.8%, of the companies polled said the expanded disclosure requirements had a significant impact on how their individual and corporate performance goals were set for short-term incentives. And 26.8% said the rules affected the design of long-term incentives.

Michael Enos, managing director at Pearl Meyer & Partners says anecdotally, his firm has seen a trend toward more formulaic short-term incentive plans, ones that leave little discretion to the board, he says. On the long term side, there’s been a rise in restricted stock programs tied to performance. “Overall, comp committee members, who are elected to use their judgment, now feel they have less flexibility to tailor programs to the company’s needs,” Enos says.

Milwaukee Journal Sentinel
May 25, 2008

CEO Pay Clearer but Still Cloudy

"Unfortunately, the disclosures have expanded to many pages, a ridiculous number of pages, and it's reflective of the tremendous amount of information," said Mark Rosen, managing director for compensation advisers Pearl Meyer & Partners. "It's all there. But is it necessarily clear?"

More than 40% of public companies surveyed by Pearl Meyer said they had longer proxies than a year ago. The 124 companies surveyed determined that proxies require, on average, the reading comprehension level of a junior in college, up from a college sophomore level last year.

The Patriot Ledger
May 24, 2008

CEO Compensation Levels Off

Despite resistance to some reforms, companies are moving in the direction of more accountability, said Mike Enos, a partner with compensation consultants Pearl Meyer & Partners.

Pearl Meyer studied 50 companies that have submitted proxies for two years under the SEC’s expanded executive compensation rules. In 2007, CEOs’ average salaries increased by about 3 percent, while annual bonuses dropped because of the economic climate and declining corporate performance, Enos said.

But long-term incentives, generally in the form of equity tied to specific performance goals, increased in 2007. “We are seeing a lot more companies incorporating performance-based restricted stock awards, which aligns well with the interests of the shareholders,” Enos said.

Workforce Management
May 5, 2008

Special Report: Executive Compensation - HR's Missed Opportunity

"The SEC doesn’t always buy the confidential treatment/competitive harm argument," says Deborah Lifshey, a Managing Director at Pearl Meyer & Partners. The unfortunate result, Lifshey says, is many companies are changing their plan design so executive compensation is determined on a more subjective basis rather than solely on objective performance goals that companies have to disclose. "Companies are making it so the performance goals they set are easy to achieve, but then the committee has discretion on how it determines the rest of the executives’ pay," she says.

Companies that didn’t disclose the performance targets last year are the ones that are being targeted with no-vote campaigns, in which shareholders withhold their votes to re-elect the board members responsible for doling out the pay package. HR executives can help their companies determine which performance metrics to use, but it can be tricky in the new environment, Lifshey says. "Maybe there is a goal that doesn’t rise to the competitive-harm standard, but the company still doesn’t want to disclose it for competitive purposes," she says. "There is going to be a tricky balance between getting the right performance measures from a business perspective and finding metrics that you want to disclose."

Market News International
April 28, 2008

Reality Check:'08 US Wage Gains Intact - So Far, Say Compensation Execs

Jim Hudner, managing director of Pearl Meyer and Partners, a compensation consulting firm headquartered in New York, said early indications of 2008 salary budget increases point to a continuation of last year's 3.8%-4.2% range. "Some employers may be slightly more conservative than they might have been with payroll increases, but at this point we're not seeing anything that would suggest that it will be dramatic," Hudner said. This contrasts with the more severe response to the 2001 recession, which followed a prolonged economic boom and fierce competition for talent that produced over-hiring and over-pay, he said.

A recruiting crunch persists today, he said, fueled in part by an aging population and fewer replacement workers in the labor force. A Pearl Meyer survey of 360 companies last fall found that the "most important resource priorities" heading into 2008 were attracting and retaining top performers, Hudner said. "And that continues to be their focus even this year," he said.

The Florida Times-Union
April 27, 2008

What CEOs Make

A 2007 survey by consulting firm Pearl Meyer & Partners found that the average executive pay disclosure statement by public companies had the readability level of a college sophomore. This year's study found the pay disclosures have the average readability of a college junior. So much for the Securities and Exchange Commission's attempts to make proxy statements more readable.

"Generally speaking, executive compensation disclosures can be difficult to read even for the trained eye," said Mike Enos, managing director of Pearl Meyer, which provides compensation consulting services to corporations.

Pension & Benefits Daily
April 24, 2008

Good Plan Design and Good Optics Possible Within Principles-Based Disclosure Rules

Compensation consultant Mark J. Rosen of Pearl Meyer & Partners said some of the unintended consequences of the [SEC proxy] disclosure rules may be to force companies to a more formulaic approach to performance measures or move to a team-based incentive. On the other hand, Rosen said it is too early to tell, since surveys of early filings show some companies moving to types of plans that are more formulaic and some moving to plans that allow more discretion - the two extremes.

Investment News
April 21, 2008

Firms hit executives in wallet

In addition to a credit crisis, most financial services firms are also dealing with declining assets, more competition and fewer acquisitions. "I think unless things turn around in the next few months, we're going to see some really hard decisions relative to compensation," said Susan O'Donnell, managing director at Pearl Meyer & Partners LLC of New York, an executive-compensation consulting firm. "It will likely be low or no cash incentives, and fewer and smaller equity awards," Ms. O'Donnell said. "The industry is definitely shifting away from giveaway to performance."

When high visibility executives leave their jobs with big parting packages, it draws criticism. "If it involves large gross-ups, tax incentives, then the criticism is well deserved," Ms. O'Donnell said. "But large sums of deferred compensation is the money that the individual has already earned, and [that] they have set aside for a number of years, [is] another story."

Pension & Benefits Daily
April 11, 2008

Company Disclosure Still 'No Piece of Cake' - But Effort Is Not Likely to Affect CEO Pay

The more exacting standards that companies applied in rating their 2008 CD&As were due, in part, to SEC staff comment letters sent to 350 companies following the first year's filings, and the fact that in preparing the 2007 CD&A, companies were "working in a vacuum," said Mike Enos, managing director of Pearl Meyer & Partners in Boston.

Reuters
April 9, 2008

U.S. politicians jump into CEO pay debate

Companies are now in the process of releasing CEO pay details in spring proxy filings, and they are increasingly concerned about how the pay data are perceived, said Jannice Koors, a managing director at pay consultant Pearl Meyer & Partners. In some cases, a CEO's pay may have risen in 2007 -- even if the company's stock price was hit that year by the mortgage problems -- because of bonuses awarded based on performance over a multiyear period when company results were better.

That doesn't mean shareholders will be happy when they see the pay data, though. "There is kind of an unavoidable potential mismatch in the timing of things, and there is no amount of regulation that is going to fix that," Koors said.

Bloomberg
March 7, 2008

Congress Will Question Wall Street Executives Over Pay

“There’s a lot more scrutiny” from shareholders and the U.S. Securities and Exchange Commission, said Theodore Sharp, managing director in the Boston office of compensation consultant Pearl Meyer & Partners.

Agenda
February 25, 2008

Wide Gap in Committee Fees Fans Concern

Many boards are sensitive to the problem, says Jannice Koors, managing director with Pearl Meyer & Partners. In the past year, she says, some of her clients have pushed the pendulum back on escalating audit committee fees. As a result, a growing number of companies have eliminated meeting fees in favor of a flat retainer across the entire board. In other cases, boards have added flat committee retainers. Other companies have added a flat retainer for all board members, with a higher committee chair fee. In many cases when meeting fees are scrapped, audit committee members or chairs are awarded slightly higher retainers, but not to the degree highlighted by the NACD survey results.

St. Louis Business Journal
February 15, 2008

Charter, Bakers, A-B, Furniture Brands execs' stock option values take a dive

"A lot of companies got a huge amount of bad press the last time they [repriced executive stock options] and it carries the risk of market backlash," said Jannice Koors, managing director at New York executive compensation consulting firm Pearl Meyer & Partners. "Also, many companies subsequent to that last downturn had to put new stock options plans in place. As part of getting those plans accepted, many said they will not reprice options without shareholder approval."

Koors said she expects in a given year most companies will let options remain underwater rather than face shareholder scrutiny over the link between pay and performance. Directors might instead target individual executives that are particularly high flight risks with extra cash bonuses or restricted stock awards.

Agenda
February 12, 2008

Comp Committees Logging Long Hours on New Disclosures

“Set the tone upfront [in your proxy],” said Mark Rosen, a managing director in Pearl Meyer & Partners’ Charlotte office. “At the very beginning of your CD&A, it’s your opportunity to explain how and why you’re unique…" He also suggested that the new disclosures paint a full picture of a company’s compensation program by describing how it fits within the company’s strategy.

Bloomberg
January 30, 2008

SEC Asks Companies for More Detail on Executive Pay

Some companies are changing their executive incentive programs to abide by the SEC rules, said Deborah Lifshey, vice president at New York-based compensation consultant Pearl Meyer & Partners. Altering a business model "for the purpose of good disclosure" would defeat the SEC's goal to increase transparency and clarity, Lifshey said.

Financial Week
January 14, 2008

At MF Global, hired gun does IPO, makes exit

"Going public is a massive job, one that can often cost a company millions of dollars in fees paid to consultants and investment banks," said Matt Turner, managing director and head of the Chicago office for compensation firm Pearl Meyer & Partners. "But bringing on a hired gun for something like an IPO can often help fix and reduce those costs, and ultimately end up being in the best interest of shareholders."

Bank director magazine
first quarter 2008

Using Board Advisers Effectively

Jan Koors, a managing director at Pearl Meyer & Partners in New York...notes the elements that go into the design of an executive compensation plan entail, among other things, a detailed understanding of tax and accounting rules, legal implications, and disclosure requirements. Koors describes the level of complexity as “labyrinthine."

CFO.com
December 20, 2007

The Storm over a Corporate Pay Study

As the numbers were used in the [House Committee on Oversight and Government Reform] hearings, says David N. Swinford, president and CEO of Pearl Meyer & Partners, "they created an impression that if a consultant is involved, pay is higher. Frankly, I think that is a perception that 15 years ago had some validity. But it's a feature of the past. Many of us now work almost exclusively for boards, and we spend a lot of time helping managements understand the pay marketplace."

Financial News
December 10, 2007

Congress pushing SEC for greater disclosure to end comp firms’ incentive to inflate top pay

[I]n the late 1990s, leading auditing firms like KPMG and PricewaterhouseCoopers sold off their consulting practices, noted Joseph Rich, chairman of Pearl Meyer & Partners, a compensation consultant that works only for board clients. “The full-service firms must be having conversations about possibly selling off their executive compensation businesses,” he said.

Barron's
December 10, 2007

Buybacks That Bite Back

The researchers suspect the major culprit [why there was not a bigger reduction in dilution following stock buybacks] was heavy issuance of stock-option grants to executives and other employees and the subsequent exercise of those options. This doesn't surprise Matt Turner, managing director of compensation consultant Pearl Meyer & Partners, who notes that the period examined by S&P covered a bull market. "In general, when the market is rising, you are going to see higher executive compensation in the form of bonuses [including options] and, because the market is rising more, people exercise their stock options," says Turner.

Compliance Week
September 11, 2007

Golden Parachutes Still Open for Business

Daniel Wetzel, managing director at compensation consulting firm Pearl Meyer & Partners, says change-in-control agreements are “an area ripe for change.” He says most companies are reviewing their arrangements to make sure they comply with new Section 409A regulations, which govern deferred compensation.

“We’ll see some reduction in benefits going forward,” Wetzel says. Beyond changes to severance multiples and benefit triggers, he says some companies have established resolutions that limit severance payments to a specific amount unless they get shareholder approval. In addition, he says, “companies are reconsidering, when there’s significant value from retirement benefits or stock options, whether there is a need to have cash severance.”

Agenda Week
September 4, 2007

Why Director Pay Strikes Boardroom Nerve

“I would say every single one of my clients is talking about it,” says Mark Rosen, a managing director with Pearl Meyer & Partners. He adds that most of the boards he works with are asking for an annual analysis of director compensation among their peer companies. That’s a change from recent years, when boards would request those studies once every two or three years, he says.

Directorship
September 2007

The Most Influential Players in Corporate Governance

PM&P President David N. Swinford was named by Directorship magazine as among those individuals “driving the corporate governance agenda inside America’s boardrooms.”

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