May 25, 2011
Study: Companies Changing CD&As
– Broc Romanek, CompensationStandards.com
As noted in this recent Towers Watson study, many companies are making changes to the CD&A sections of their proxies. One-half of the 170 Fortune 1000 companies that Towers Watson studied (50%) added an executive summary to their 2011 proxy statements, and as a result, nearly two-thirds (64%) of companies now include an executive summary. Additionally, 85% disclosed specific performance goals for the 2010 plan year, while more than three-fourths (78%) showed actual performance attained for 2010 to support the annual bonus paid.
Other findings from the Towers Watson proxy analysis include:
– Almost three in 10 (29%) companies made one-time and/or retention grants in 2010, compared to 16% in 2009. The vast majority of grants in both years were awards that vest solely on the basis of time.
– One-fourth (25%) of companies changed the performance measures used for 2010 annual bonuses, while slightly fewer (24%) changed performance goals for long-term incentive awards.