Executive pay among corporate governance issues for 2013

Becky Yerak, Chicago Tribune, December 24, 2012

Wall Street isn’t far from its record highs in 2007, but shareholder activists continue to keep management and boards of directors on their toes.

In 2013, trends to watch for in executive compensation and corporate governance include the first round of shareholder votes on the pay of top management at smaller businesses.

Also, more companies are publicly documenting their efforts to keep investors in the loop, right down to assuring them that new directors have passed thorough background checks.

And many corporate watchdogs wonder when the Securities and Exchange Commission will propose rules — mandated by a 2010 law — that require companies to give hard numbers on the ratio between the pay of the chief executive and their average midlevel worker, data that could create new tension between those critical of executive pay and those who set it. Until then, passions over pay levels might remain cooler than they have in years.

Executive compensation isn’t the “hot button issue it was two or three years ago,” said William Atwood, executive director of the Illinois State Board of Investment.

Say-on-pay votes and enhanced corporate transparency about compensation since the 2010 Dodd-Frank Wall Street Reform & Consumer Protection Act have “increasingly ameliorated shareholder angst” on the topic, he explained.

But big investors’ attention is increasingly turning to political contributions made by companies, which will be under more pressure to disclose what they’re doling out and their policies for doing so, Atwood said… Continue reading

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