Determining the pay of top executives has become a high-profile, high-stress job for compensation committees at many public companies. First there was the outrage over CEO perks. Then came the stock-option backdating scandal, which last week claimed UnitedHealth Group CEO William McGuire.
Now companies are wrestling with new Securities and Exchange Commission rules requiring them to more fully disclose how they pay executives and show how their compensation is tied to performance.
As a result, boards of directors are finding it harder to fill positions on their compensation committees, consultants say.
"People are calling them the new audit committee," says David Swinford, a managing director at Pearl Meyer & Partners, a New York-based compensation consultancy. Audit committees are responsible for making sure all of the company’s financial reports and SEC filings are correct—a particularly onerous task in the wake of the Sarbanes-Oxley Act of 2002.
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