Will this put an end to pay for pulse?
SEC Commissioner Roel Campos talked about the propensity of paying some executives for having a pulse, rather than based on any form of performance, either real or imagined. Will these new rules change that? Hard to say, though the unanimous vote that the five commissioners took a short time ago is certainly a step in the right direction. Of course, corporate attorneys and compensation experts (and others who represent their interests) are likely to flood the SEC with comments on how onerous and unfair these new rules will be. How can individual investors and others who think executive pay has gotten out of control fight back? By submitting their own comments once the SEC allows them. Though the rules are not yet available, I’ve posted a copy of the fact sheet that the SEC handed out to journalists here.
Since footnoted.org spends a lot of time looking at executive compensation issues and how they relate to stock performance, I’ll be paying close attention to this and encouraging readers to send their own thoughts to the SEC. Many of the proposed rules are simply too important to allow them to be watered down. For example, as Campos noted in his comments when talking about the proposed disclosure on perks that exceed $10K, it’s not the amount of the perk that is often so troubling. It’s the fact that people who are already well compensated get all sorts of other things handed to them. Like a stipend for volunteering. Or a Porsche SUV when they retire. Or the keys to the corporate jet — all things that I’ve blogged about recently.
Finally, a big thanks to everyone who helped to fund my live-blogging experiment today. Your donations were much appreciated. They also taught me just how profitable PayPal really is: for those who donated $1, PayPal kept 33 cents. Not a bad business model!