Area Development News Desk (03/17/2009)
A substantial number of U.S. companies are freezing salaries and
reducing or eliminating bonuses for their executives, according to a
survey by human resources consulting firm Watson Wyatt. The survey says
that of 145 companies polled during the first week of March, 55 percent
have frozen executive salaries and 48 percent plan to decrease their
bonus pool by an average of 40 percent. Additionally, 23 percent have
added "clawback" policies to their executive compensation packages,
meaning that the companies can recoup compensation under certain
circumstances in which an executive's actions damage the company. "The
recession has shone a light on executive pay, causing many companies to
re-evaluate the long-term implications of their executive pay
policies," says Andrew Goldstein, Watson Wyatt's co-leader of North
American executive compensation consulting. "Although boards are still
under pressure to make changes, it's still not clear whether the
changes they have made have been aggressive enough to placate
shareholders." The results of the new survey are sharply different than
one Watson Wyatt took last December, when only 21 percent of companies
reported salary freezes. Watson Wyatt says the companies surveyed come
from a variety of industries.
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