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The thinking is, if you’re doing something that’s not fraudulent but is inappropriate and perhaps impacts the share price, why wouldn’t it warrant a clawback?” said Aalap Shah, managing director at Pearl Meyer.
In the report, Jan Koors notes, “The best-in-class compensation committe committee will ask: ‘Have we created a leadership team, an environment, and an executive pay structure that gives our board and this organization the flexibility—as well as the creativity and the confidence—to do what’s right, not necessarily just what’s documented on paper?’”
“With all the data out there and pay equity in the spotlight, companies need to start doing a better job of explaining to people how pay is set and determined," said Sharon Podstupka with Pearl Meyer.”
Managing Director Simon Patterson says, “The new Financial Reporting Council guidelines are good. They suggest discretion is important, that the (remuneration) chairman must have at least 12 months experience on the committee before being named chairman, and that it’s up to them to make good decisions.”