Wednesday, July 12, 2006

Investors urged to watch director pay, stock holdings


For years, critics have howled about executive pay, saying something must be done to curb excessive compensation.

Now some are challenging what they consider one of the root causes: pay for the directors who set chief executives' compensation packages.

Director compensation has risen sharply in the past few years as demands on boards have ratcheted up since the Sarbanes-Oxley corporate governance law passed in 2002.

A recent study by the Institutional Shareholder Services proxy advisory firm found that the average compensation for directors at the largest U.S. firms disclosed in 2005 proxies rose 14 percent, to just under $144,000. That's on top of a 23 percent increase a year earlier for what is, after all, part-time work.

See full Article.