At the other extreme, Switzerland'sUBSAG agreed as part of a governmentrecapitalization plan to use international "best practices" for executive pay and acceptgovernment monitoring.The U.S. financial-rescue law falls somewhere in between. For the five top executives at participating companies, the Treasury Department is limiting corporate-tax deductions onexecutive pay and "golden parachute" payments for departing executives, requiringcertain companies to recover awards to executives that were made based on inaccurateresults, and barring incentives given executives to take "unnecessary and excessive risks.""It's the first time in history that there has been a spontaneous international effort to reinin executive pay," said Ira Kay, head of executive-compensation consulting at WatsonWyatt Worldwide in New York.But it is unclear which, if any, of the approaches will be effective at curbingcompensation. Past efforts in the U.S. generally haven't slowed the rise of executive pay but instead shifted the way top managers are rewarded. Executives outside the U.S.typically make less, but experts say that is due more to historical and cultural factors thangovernment rules.One skeptic is Anne Simpson, executive director of the International CorporateGovernance Network, a London group representing more than 500 institutional investorsin 40 countries. Government pay curbs for bailed-out concerns "might throw some sandin the cogs" temporarily but won't fix what Ms. Simpson considers a bigger problem: thelack of accountability of corporate boards.There are some indications of a broader shift in attitudes. Some executives in severalcountries are voluntarily limiting pay, even when not required by the new rules.DeutscheBank AG said its 10 top executives will forgo 2008 bonuses, even though Germany's biggest bank doesn't plan to accept government cash. The ousted chief executive of French-Belgian municipal lender DexiaSA renounced his €3.7 million "golden parachute." Robert Willumstad, replaced last month as CEO of American InternationalGroupInc. as part of a U.S. government rescue, later said he won't accept his $22 millionseverance payment.The hastily imposed limits included in bailout measures likely portend more sweepingefforts to control pay by lawmakers and shareholders next year. In the U.S., both major- party presidential candidates, Sen. John McCain and Sen. Barack Obama, support givingshareholders an annual nonbinding vote on compensation of top executives; a billrequiring such votes passed the House of Representatives last year, but wasn't voted on inthe Senate. The U.K. and Australia are among countries that already require such votes.In Congress, key Democratic members, who likely will retain control of the body, havealso signaled interest in broader measures. The bailout law "creates the floor for executive pay and governance-reform packages" in Congress next year, suggestedRichard Ferlauto, head of corporate governance and pension investment at the American
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