May 3, 2010
Towers Watson: Splits Off a Small Chunk of Its Board Advisory Practice
– Broc Romanek, CompensationStandards.com
On Friday, Towers Watson announced that a small chunk of its advisors who serve compensation committees have decided to split off into its own independent, non-affiliated consulting firm – called “Pay Governance LLC.”
After conducting an extensive study, Towers Watson decided it will continue to maintain its own compensation committee practice, with safeguards to ensure independence from the rest of the firm are in place – and with the vast majority of its executive pay consultants remaining with the firm. As noted in its press release, Towers Watson acknowledges that the EC consulting market has changed in the US – but believes that companies will continue to seek out its consultants, either as board advisors or advisors to management.
Pay Governance LLC will formally launch on July 1st (a little strange for a new entity to be created, but not start functioning for a few months) and include notable advisors John England and Richard Meischeid. Ira Kay will also join this group – Ira had already split from Towers Watson earlier this year. Under the terms of the transaction, Towers Watson, – in consideration of certain payments by Pay Governance LLC – will transition a number of current and former Towers Watson associates to the new firm over the remainder of 2010, with additional staff transitioning after that based on market demand.