Yesterday I was talking with some compensation colleagues from across the country. The topic of the day was executive compensation disclosure. My colleagues mentioned that in the last month, during 4 separate client engagements, the client's Board or top management requested a breakout of the CEO’s compensation showing how much of the CEO’s pay was for vacation time.
It appears that some organizations are opting to err on the side of complete disclosure. However, this type of approach raises two questions for me.
First, salary surveys do not break out pay by time worked vs. time not worked. How can we effectively benchmark when there are no data available?
Second, where does disclosure stop? Do we then move to pay for time spent at lunch, pay for time spent traveling on business, etc.?
We need to watch executive compensation to prevent more examples of excess and abuse like we’ve seen in the news the last few years. Disclosure is a good thing for organizations and shareholders alike. However, do we eventually cross a point where there’s too much information? Does the government have the right to monitor everything a private organization does?
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