The Treasury has released its Fact Sheet on the drraft legislation delivered to Congress that would govern the independence of board compensation committees.
Document Excerpt
Today, as part of its push for comprehensive regulatory reform, Treasury delivered draft legislation to Congress that would take steps to ensure that compensation committees are independent in fact, not just in name. Compensation committees are responsible for negotiating executive compensation arrangements that protect long-term shareholder value. Yet some compensation committees may not be fully independent of management–for example, because the directors themselves stand to gain from the decisions of executives. And even where the members of the committee are independent of management, they may lack the tools to bargain effectively with executives over complex compensation decisions or may receive advice from consultants or legal counsel that face conflicts of interest.
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