The Advisors' Blog

– Broc Romanek, CompensationStandards.com

Here are the survey results from our most recent Quick Survey, repeated below (compare these to an identical survey we conducted three years ago):

1. Does your compensation committee:

– have a policy that it will not employ any compensation consultants who perform services for management – 30%
– not have such a policy, but does not intend to employ any of the same compensation consultants as management – 50%
– employ some (or all) of the same compensation consultants used by management – 20%

2. In practice, how does your compensation committee go about hiring an expert for making recommendations regarding CEO compensation?

– Management offers up a consultant to the compensation committee that it finds acceptable, subject to committee approval – 55%
– Compensation committee left completely on its own to find and hire whatever consultant it wants – 40%
– Compensation committee has not hired an expert for setting CEO compensation – 4.9%

3. Assume the company already is using consultant A for general compensation advisory purposes, will your compensation committee:

– Use the same consultant to help set executive compensation – 10%
– Use a different consultant to help set executive compensation – 70%
– Too early to tell what the compensation committee will do going forward – 20%

4. Regarding compensation committee charters, the committee has:

– A charter that states that the compensation committee will be the sole entity in the company to hire compensation consultants specifically related to CEO compensation – 80%
– A charter that states that both the compensation committee and management have the authority to hire compensation consultants specifically related to CEO compensation – 0%
– A charter that does not address who hires compensation consultants – 20%

Take a moment to participate in our “Quick Survey on Clawback Policies.”