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The article copied below appeared in Global Proxy Watch, a private weekly newsletter covering international corporate governance developments for clients of Davis Global Advisors, Inc.



Watershed Here’s more evidence that the Nardelli Effect—the backlash over Home Depot’s US$210 million payout to ousted CEO Robert Nardelli—is fueling watershed drives to align US CEO compensation with investor interests. For one, the Options Policies Forum—convened by investment banker Gary Lutin—has brought investors and select corporates together to fashion best practice recommendations on compensation. Backed by Hermes Equity Ownership Services (EOS), the Forum aims for a private sector solution, and plans to issue findings in March. Second, two hugely unlikely partners, the Carpenters Union and the US Chamber of Commerce, are recruiting members for a Working Group on Executive Compensation. Four half-day sessions are to produce a memo outlining agreed measures by a July 26 target date. Third, the International Roundtable on Executive Remuneration—a forum of big funds—is preparing a tough common strategy on pay policies in the US. Finally, an ad hoc investor coalition is pressing corporates to disclose any conflicts of interest their outside compensation consultants may have. There’s more activism on pay to come. Watch this space. [Note: GPW editor Stephen Davis is a board member of EOS.]





GLOBAL PROXY WATCH © 2007 Davis Global Advisors Inc All rights reserved ISSN 1534-8822 Jan. 19 2007

Stephen Davis, editor. DGA 57 Hancock St. Newton MA 02466-2308 USA T +1 617 630 8792 F +1 617 630 0398 E





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