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Companies are failing to effectively communicate executive compensation in proxies according to a new study by the Rock Center for Corporate Governance at Stanford University.
‘‘The role of the director is arguably more complex than it’s ever been,’’ said Brett Herand, executive compensation consultant and vice president at Pearl Meyer.
Compensation committees are being advised to be mindful of proxy advisory firms, particularly ISS, but not to forget that compensation design should be tied to business strategy.
A look at why collaboration on the executive compensation plan is essential and how giving consultants more say over the compensation committee's agenda can help.
Boards are being advised to assess how their equity plans stack up against ISS’s new approach to evaluating them, but some consultants have said the latest document does not provide enough clarification.