Governance Then And Now: Directors’ View On Executive Pay

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For the 20th anniversary of our What Directors Think research franchise, we took a look back at issues affecting governance at the turn of the century—and how directors’ perspectives have evolved since. This is the first of a four-part series.

What a difference a couple decades make. At least when it comes to the hairy topic of public company compensation disclosures.

In 2003, our What Directors Think survey found three-quarters of directors saying that then-proposed CEO pay ratio rules would negatively affect the advancement of corporate governance in the United States. Only 13 percent at the time believed it would help.

Ten years later, in 2013, 70 percent told us the SEC’s proposal for disclosure of CEO/median employee pay ratio would be misleading—and 47 percent said it would be extremely difficult, if not impossible, to accurately compile and report. Only 17 percent felt it would provide meaningful information to investors.

And today? Does this contentious issue still plague the nation’s boardrooms?

Not so much.

Corporate Board Member’s latest What Directors Think survey, conducted in partnership with Diligent Institute for a third consecutive year, finds directors relatively unphased by the challenge these days.

While executive compensation is the third most requested topic of conversation by shareholders, according to the directors participating in our survey—right on the heels of strategy and performance—only 10 percent of those we polled this year they found it a particularly challenging issue.

While views have changed through the years, few directors agree still today that shareholders should have a say in approving CEO compensation packages. “Compensation committees need to exercise courageous independence in dealing with all executive pay matters,” said one surveyed director.

And, perhaps, a bit less fear about change?

To view more of the findings from our What Directors Think survey and hear firsthand from directors on some of the top issues facing boards today, visit

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