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