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Survey: More Companies Freezing Exec Pay, Bonuses

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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