Information to be Provided in
Compensation Survey Report
Discussions with Forum participants of recent news developments, including
particularly the coincidental reports of
unexpectedly large compensation commitments to the terminated executives
of two companies and an
SEC decision to modify a rule for reporting options, have led to plans
for an additional project: specifying the information to be included
in an annual survey report of executive compensation.
Our objective is to decide what information the Forum should include in a
definitive report of corporate compensation commitments to top executives,
considering both what is relevant to decision-makers and what is either
available in SEC filings or reasonable for companies to provide. The
resulting report should serve all segments of the marketplace:
Investors will have access to a reliable, cost-efficient
source of whatever compensation information they need for capital allocation
and voting decisions.
Corporate managers will have a similarly reliable source of
the information they need to consider in their policy decisions.
Professionals will have a source of standard, properly defined
metrics on which to base academic or commercial research.
This new project will of course require our attention to compensation issues
beyond the scope of options, but it should fit well with the
four projects established at the December open meeting. Developing
specifications for a report of decision-making information may in fact
provide a common focus for all of the other projects. To whatever extent
the projects are coordinated, we expect to follow the original Forum program
schedule to present preliminary recommendations of information
specifications for review at the Forum’s second open meeting in
mid-February, and the final recommendations will be included in the Forum’s
Advisory Panel report due in March.
Please let me know if you have any questions or comments. Suggestions will
be welcomed from anyone interested in helping us define the information
required for more effective marketplace decisions.
GL – 1/8/07
Lutin & Company
575 Madison Avenue, 10th Floor
New York, New York 10022