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Executive Trends – 2011

As the first year of Dodd-Frank comes to a close, we recap the major trends in executive compensation from the previous year:

  • Focus on structure, design and stability of executive contracts as economy begins to pick up
  • Closer communication with shareholders
  • Significant concern with external governance and pay for performance
  • Emphasis on accurate goal-setting and formula to measure performance

Predictions for 2012 and beyond:

  • Pay for performance will continue to be the flavor of the day, taking up a higher percentage of overall compensation
  • Continuing efforts to streamline and improve formulas and metrics to measure performance
  • Deeper reliance on peer groups and focus on long-term incentives
  • Further attempts to eliminate inefficient pay practices
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