SEC Delves Deeper Into Execs' Pay

Regulator pushes companies to reveal criteria for measuring performance
By Jim O'Neill,  Newser User
Posted Jan 29, 2008 3:28 PM CST
The Securities and Exchange Commission has sent a second round of letters to companies critiquing the way they described the pay of their top executives.   (Getty Images)
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(Newser) – The SEC wants companies to tell shareholders how they measure an executive’s performance when calculating pay, but companies are balking, reports the Wall Street Journal. Their reticence has prompted the commission to send out a second wave of letters to some of the 350 companies it originally queried after receiving somewhat vague answers.

Companies say they’re concerned that revealing too much information about performance goals, like return on capital, could hurt them competitively. But the SEC, under pressure from shareholder groups who contend executive compensation has gotten out of hand, wants more information in shareholders’ hands. Critics maintain a company’s overall performance—share price or earnings—are a better determinant.