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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: BWAC who wrote (3064)	9/17/2002 1:12:04 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

Top US business group seeks crackdown on exec pay Tuesday September 17, 1:03 pm ET NEW YORK, Sept 17 (Reuters) - A top business group on Tuesday proposed reforms aimed at cracking down on executive compensation, which ballooned during the economic boom of the past decade. The Conference Board, a not-for-profit organization whose members include top business executives from around the globe, recommended stricter rules on stock options, greater independence for compensation committees and faster disclosure on stock sales by insiders. The proposals were developed by a 12-member blue-ribbon commission whose members included Peter Peterson, chairman of The Blackstone Group and chairman of the Federal Reserve Bank of New York; John Biggs, chairman of the TIAA-CREF pension system; Andrew Grove, chairman of Intel Corp. (NasdaqNM:INTC - News); and Paul Volcker, former Federal Reserve chairman. The reforms follow the passage of the Sarbanes-Oxley Act in July, which was the biggest overhaul of U.S. securities laws since the 1930s. It forced faster disclosure of execution stock transactions as well as regular certification by top executives attesting to the accuracy of their company's financial statements. As well, this past summer the New York Stock Exchange, the Nasdaq Stock Market and the American Stock Exchange forwarded proposed rule changes to the U.S. Securities and Exchange Commission that would tighten corporate governance rules for their listed companies. But The Conference Board said some issues could not be fully addressed by regulation and legislation, adding that there was a need for companies to change their policies. "The commission believes that there has been a 'Perfect Storm' -- a confluence of events in the compensation arena which created an environment ripe for abuse," the commission said in its report. The panel recommended tighter control of fixed-price stock options, which are options that vest without the requirement that set performance goals are met. That compares with incentive-based stock options that vest when specific performance targets at a company are achieved. "The excessive use of stock options -- especially fixed-price options -- was encouraged by the fact that they did not result in a charge to earnings while providing substantial tax deductions," Peterson said in a statement. The report said executive compensation has become "too 'delinked' from long-term performance goals." The commission recommended that fixed-price stock options be expensed. As well, companies should make "conspicuous disclosure of the size, costs and effects" of stocks options on earning per share. It should also disclose the percentage of total equity represented by unexercised options. The commission also said compensation committees needed to act independently of management and hire their own consultants. As well, compensation committees should schedule their own meetings and set their own agenda and hold executive sessions as needed. Key executives and directors should be encouraged to hold a significant amount of the company's stock, to provide incentive to manage the corporation for long-term performance. And companies should require senior executives to provide advanced notice of their intention to sell stock. The commission received funding from The Pew Charitable Trusts.