Future Directions for Executive Compensation

In 2006, the SEC issued new rules on the disclosure of executive compensation. Improved disclosure is also important to investors because it will enable them to make an informed investment decision, whether it is voting proxies or deciding to buy or sell a company's stock. Nothing is of greater interest to an investor considering whether to buy or sell than whether the company has an incentive scheme that aligns the interests of management and shareholders. Nothing is of more interest to a shareholder who is considering candidates for election to the board (including members of the compensation committee) than the priorities reflected in the compensation plan they approve and the independence of the members of the committee. Shareholders w....