New rules for CEO compensation in effect

Hillary Wicai Dec 15, 2006
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New rules for CEO compensation in effect

Hillary Wicai Dec 15, 2006
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DOUG KRIZNER: Speaking of pay, today companies begin to use new disclosure rules for executive and director compensation. The Securities and Exchange Commission has made its largest revision to these requirements in 14 years. Hillary Wicai has more.


HILLARY WICAI: The new SEC rules require much more disclosure about what executives and directors are paid.

The idea is that investors should be able to, at a glance, figure out how much CEOs are making.

John White is with the SEC. He says all of the various forms of executive compensation will now be added together to create a single number.

JOHN WHITE: Cash, bonuses, options, restricted stock, change in the value of your retirement benefits and any other type of compensation.

James Cox at Duke University believes the new requirements could slow the rapid rise in executive compensation.

JAMES COX: Executive pay has been going up, up, up regardless of whether the performance of the firm has been improved.

Investors made it very clear that executive pay was important to them. When the SEC voted on the new rules in July, it had received more comments on the issue than any other in its 72-year history.

I’m Hillary Wicai for Marketplace.

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