The Advisors' Blog

– Broc Romanek, CompensationStandards.com

As noted in this WSJ article from yesterday, a number of companies are moving away from using advisors from the larger multiservice consultants in the boardroom for advice on executive pay packages. This has been spurred by the SEC’s new disclosure requirements about conflicts (although some of these new requirements are still a little ambiguous), possible Congressional action in this area and pressure from some shareholders.

Over the past few years, key compensation consultants have left these larger consulting firms to form their own small shops. The most recent is Ira Kay, who has left the newly combined Towers Watson. It may be a matter of time before the Mercers and Towers Watsons of the world stick to general HR consultancy (ie. actuarial and other non-exec comp services) and don’t handle the much smaller practice of executive compensation consulting.

If your company is struggling with what to do in this area and is trying to decide whether to go with an “independent” consultant, please let me know and I will keep it confidential. I know other companies in the same situation who want to confer with like-situated companies.