SEARCH
AFL-CIO Coalition Approves Guidelines for CEO Performance, Pay |
The AFL-CIO and a broad coalition of institutional investors, large corporations and prominent academics agreed to a core set of principles aimed at shifting the focus of management to long-term goals for performance and executive compensation instead of being rewarded on the basis of meeting quarterly earnings targets.
The guidelines, announced June 18, have been dubbed the “Aspen Principles” for the place where the idea germinated. They attempt to break the cycle of top managements’ knee-jerk reactions to Wall Street’s expectations for quarterly earnings. Instead, the signatories to the Aspen Principles recommend rewarding top executives for creating long-term strategic values for buy-and-hold investors.
The Aspen Group seeks to help companies set long-term executive compensation goals, helping investors know and understand the long-term goals of corporations.
Members include the Council of Institutional Investors, the Business Roundtable (which represents more than 150 of the nation’s largest corporations), as well as Citigroup Inc., Pfizer Inc., Xerox Corp., Pepsico Inc. and pension funds such as the New York State Common Retirement Fund and the California School Teachers’ Retirement System.
The guidelines call for companies to stop providing quarterly earnings guidance to securities analysts, compensation committees to be comprised solely of independent directors with relevant expertise and require companies to disclose their succession planning process to investors.
The principles also recommend that companies award stock options and other equity compensation at fixed times each year to prevent the manipulation of grants, and advocate that corporate directors communicate with long-term investors on executive pay.
The Aspen Principles also require senior executives to hold stock for the long term, and allow companies to recoup incentive compensation if performance targets were falsely met or if companies restate earnings.
1 Comment
Sorry, the comment form is closed at this time.
CEO Pay
ByDave Hurlburt CWA local 9410 ©2007
We want to have our say on CEO pay.
They make more than our President’s pay.
More in one day than we make all year,
How can we not have corruption here?
How come their pay is so very enormous?
It is not even based on long term performance.
Let us not even mentioning options on stock,
The corporate treasury has lost the lock.
Stock holders and employees need to have a say,
Dividends and stock prices fall but not CEO pay.
Defined Pension and health care plans go broke;
While we taxpayers pay the bills and that’s no joke.
Corporations use the bankruptcy laws to break their word,
Contracts, pensions are lost and not CEO pay it is absurd.
They stop payments to pension plans and hide the money,
Loosing our healthcare and our pension is not at all funny.
The PBGC is not to be used for corporate welfare.
Robbing employees and taxpayers is just not fair.
These wealthy CEOs should pay taxes at a fair share rate.
Pensions the same as their workers should be their fate.