President & CEO: Executive Comp – There’s a New Marshall in Town

President & CEO: Executive Comp – There’s a New Marshall in Town

September 6 2012

By Gregory Taggart
President & CEO Magazine

Excerpts:

“[ISS and Glass Lewis] exert a lot of muscle when making recommendations about how to structure compensation programs,” reports Steven E. Hall, managing director of of New York-based compensation consulting firm Steven Hall & Partners.  “Some of their ideas make a lot of sense; others often don’t fit a particular set of circumstances.”

“I’ve been in this business for 30 years,” Hall says, “and I remember going to make a presentation to my first client.  The first thing I heard as I walked into the room was everybody opening the envelops I had mailed them a week before.  They were reviewing the material for the first time.”

“For the performance metric, board often use total shareholder return or TSR, a relative measure that compares how, say, our company did in terms of stock price appreciation and dividend payments versus a group of comparable companies,” Hall explains.  The beauty of that approach, he continues is that “it’s ery defensible to stand in front of your shareholders and say ‘look, our executives are only getting money if you’re getting money or if we’re performing better than everybody else.'”

“The benefits sections of the proxy, where we talk about what people get, are much less generous than they used to be,” he says.  “The big one that continues in place is the corporate jet.”