|  | | 2005 News and Press Releases | | |
HEADLINE NEWS:
Pension Funds Prod Firms To Show Management Compensation Packages
Staff Writer – Sacramento Bee (CA)
Securities Mosaic. December 22, 2005
_________________________________________________________________________
EXCERPT: Arguing executive pay is out of whack with the long-term financial health of some of the nation's largest corporations, major pension funds are prodding federal regulators to compel companies to spell out details of management compensation packages. The move comes as Securities and Exchange Commission Chairman Christopher Cox pledges to enact the first changes in executive compensation rules since 1992. "Prudent executive compensation packages are a top priority for the board," said Christopher J. Ailman, chief investment officers at the California State Teachers' Retirement System, the nation's third-largest public fund with $132 billion in assets. "We believe that accessible, transparent disclosure of compensation packages is an essential part of responsible corporate governance." In a Nov. 30 letter to the SEC, CalSTRS, the California Public Employees' Retirement System and eight other U.S. and European pension systems criticize disclosure practices in corporate America, saying current rules "have serious deficiencies that limit the ability of investors to evaluate the structure and operation of executive compensation plans." "There are clearly disclosure problems. The SEC needs to play a role," said Mark Van Clieaf, managing director of MVC Associates International, a corporate board consulting firm. The 10 funds cite research by Van Clieaf's firm, which found 60 companies in the Russell 3000 lost $769 billion in market value and $475 billion in economic value over five years ending in 2004 while paying their top five executives more than $12 billion. "What we tend to find is the short-term nature of what executive management is held to," Van Clieaf said. "A large percentage of companies have not put in longer performance measurements." |
|
|
