According to a press release, the survey found that only 12% of respondents said they are very well prepared for the say-on-pay legislation, while 46% said they were somewhat prepared. Just under one-fourth of respondents (22%) didn’t know if their companies were ready.
In preparation for the say-on-pay legislation, nearly seven out of 10 respondents (69%) said they are identifying potential executive pay issues and concerns in advance, while six in 10 (60%) said they are improving their Compensation Discussion & Analysis to better explain the executive pay program’s rationale and appropriateness for the company. In addition, many companies indicated they are engaging with proxy advisers (44%) to discuss areas of concern, meeting with key institutional shareholders (29%) and preparing a formal communication plan (23%).
More than one-half (59%) of respondents indicated they believe that proxy advisory firms have substantial influence on executive pay decisionmaking processes in U.S. companies; however, 42% said that guidelines established by proxy advisory firms have had no or minimal impact to this point on the design of their executive compensation programs.
The press release pointed out that the financial reform legislation awaiting compromise by the House and Senate includes a say-on-pay provision that would give shareholders of publicly traded U.S. corporations a nonbinding vote on executive pay.The Towers Watson Executive Say-on-Pay Flash Survey was conducted online in June 2010 and is based on responses from 251 U.S. publicly traded and privately held corporations representing a cross section of industries. The full results of the survey will be available in July.