Compensation Goodies

Shareholders Benefit

Richard Bennett, CEO of The Corporate Library, an independent firm that researches corporate governance and compensation issues, hails the move for more disclosure of the true nature of executive pay: "Shareholders will be able for the first time to see in real time the tremendously important numbers -- warts and all -- exposed for viewing."

Says Bennett: "Compensation practices are the best window that investors have into the boardroom of the companies they own. The numbers reveal the quality of decision-making and the power relationship between the directors and the CEO."

The Corporate Library employs 25 people who sift through proxies to compare the newly mandated disclosures. Bennett says the translation to online interactive data at the SEC Web site will make their job easier. But his group has already issued two reports detailing some egregious compensation practices.

Big Dollars in Deferred Comp

One of the largest is the category of "non-qualified deferred compensation plans." These plans have not been reported in the past. Just as athletes defer salary to future years, so do corporate executives. They're not qualified retirement plans, but are meant to be paid out in the future, when the executive retires -- and will presumably pay taxes on them at a lower rate. In the meantime, they may be "invested" in company stock or other alternatives, and continue to grow.