Even Companies Taking Steps are Deferring the Most Difficult Measures

WASHINGTON--(Business Wire)--
Even as momentum continues to build to require a shareholder vote on executive
pay at all publicly-listed firms, few companies have taken steps to prepare for
Say on Pay or plan to do so in the next six months, according to a new survey by
independent compensation consultancy Pearl Meyer & Partners released today at
the National Association of Corporate Directors Corporate Governance Conference.

This past summer, the U.S. House of Representatives approved the Corporate and
Financial Institution Compensation Fairness Act of 2009, which would require an
annual, non-binding advisor shareholder vote on pay. Most observers expect the
U.S. Senate to also approve the legislation.

Yet just 7% of the 231 survey participants in Pearl Meyer & Partners` online Say
On Pay Survey said their company is "very concerned" about such a vote, and
another 35% indicated they were only "somewhat" concerned. Moreover, more than
two-thirds (66%) said their company hasn`t taken any steps to prepare for a Say
on Pay vote and only 35% plan to do so in the next six months. Survey
respondents were mostly compensation committee members, top human resources
professionals, and members of the compensation group.

"Public companies are surprisingly reticent to address the very real likelihood
of mandatory Say on Pay votes," said Mike Enos, Ph.D., Managing Director of
Pearl Meyer & Partners. "Although many believe such a requirement will not take
effect the until 2011 proxy season, decisions being made now regarding 2010
compensation practices could potentially be the subject of Say on Pay votes in
2011."

Three-quarters of respondents predicted shareholders would approve a Say on Pay
vote if it was held. "However, our experience with TARP clients suggests that
proxy advisor groups have and will continue to recommend `no` votes for some
companies," Enos said. "The first shareholder vote against pay is more likely a
question of `when,` not `if.`"

Companies Focus on Relatively Simple Steps, Rather than Tackling More Difficult
Issues

Companies that have begun preparing for Say on Pay are most focused on steps
that are easily achievable or are already part of their annual compensation
review. Such common activities included:

* Reviewing proxy compensation disclosure and analysis (CD&A) and related tables
to ensure executive compensation disclosure is clear, complete and not subject
to misinterpretation (82%)
* Keeping abreast of the results of Say on Pay proposals at other companies
(81%)
* Reviewing market benchmarking practices, particularly with respect to
selection of appropriate peer groups (69%)
* Conducting analyses to ensure there is a strong link between executive pay and
performance (62%)
* Identifying any perceived poor pay practices in their executive compensation
philosophy and program design (57%)

On the other hand, only 35% of respondents who indicated they were actively
preparing for Say on Pay said they inquired into their institutional
shareholders` general views on Say on Pay or whether those investors are likely
to follow the recommendations of proxy advisory firms. Additionally, about
one-third (30%) of all respondents said they were unfamiliar with the overall
voting guidelines of proxy advisory groups. "By failing to anticipate the
attitudes and policies of institutional shareholders and proxy advisory firms,
companies risk being blind-sided at the last moment," Enos said.

The quality of shareholder communications also has received little attention.
Only 22% of respondents who indicated their company has taken steps to prepare
for Say on Pay reported having in place an effective shareholder communications
strategy, which would include a process for gathering feedback from
institutional shareholders, unions and/or other constituencies on executive
compensation programs.

About the Survey

Pearl Meyer & Partners` "Say on Pay" survey took place in July and August 2009
and examined views on advisory shareholder votes across a broad range of
industries and organization sizes. A total of 231 respondents participated in
the survey, mainly compensation committee members, top human resources
professionals, and members of the compensation group.

The full survey is available at www.pearlmeyer.com/sayonpaysurvey.

About Pearl Meyer & Partners

For 20 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 governance, strategy and program design. The firm provides
comprehensive solutions to complex compensation challenges for companies ranging
from the Fortune 500 to 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.

for Pearl Meyer & Partners
Kim Dobbins, 847.332.2626
kdobbins@dobbcomm.com



Copyright Business Wire 2009