Few Tech Firms Offer Say on Pay

February 17, 2009 (PLANSPONSOR.com) - The vast majority of technology company chief financial officers participating in a recent poll said their company does not allow shareholders a voice in setting executive compensation levels.

A BDO Seidman news release said 89% in the survey do not provide for a “say on pay” mechanism, up from 69% last year, while 11% provide a shareholder voice on c-suite pay, down from 31% last year.

Moreover, only one-third (34% down from 61% in 2008) of the CFOs personally feel shareholders should have a say on executive compensation plans in 2009.

According to the announcement, the BDO Seidman poll also found that fewer than a quarter (24%) of technology businesses will offer replacement grants, 14% will reprice options, and 6% are planning to eliminate options for employees.

“While President Obama, regulatory organizations and shareholder advocacy groups continue to push for more executive compensation disclosure and oversight in 2009, few companies in the technology sector seem to be prioritizing corresponding measures in their compensation plans,” said Andy Gibson, a Partner in BDO Seidman’s Technology Practice and Co-Leader of the firm’s National Executive Compensation Practice, in the announcement.

Other survey findings include that:

  • As the Securities and Exchange Commission (SEC) adjusts the timeline for moving all U.S. public companies to International Financial Reporting Standards (IFRS) from the U.S. Generally Accepted Accounting Principles (GAAP), only 21% indicate that their company would adopt the standards early, if given the opportunity.
  • When asked if the switch from GAAP to IFRS will make U.S. companies more competitive with international firms, the majority (71%) indicate that there will be no impact on competitiveness.
  • External hacking or breaches (38%) is seen as the most potentially harmful security-related issue, followed by intellectual property infringement (32%), misappropriation of assets (18%), and identity theft (12%).

The national telephone survey conducted by Market Measurement, Inc., was based on pure random sample of U.S. technology companies in the software, hardware, telecommunications, Internet, and information technology services sub-sectors. The companies in the random sample had revenues up to $30 billion. The survey was conducted in January 2009.