HR Policy Association in conjunction with the Center On Executive Compensation believes sound corporate governance practice is necessary to promote long-term shareholder growth. Specific to executive compensation, the Center believes corporate governance best practices begin with ensuring compensation decisions are aligned with the best interests of shareholders and other stakeholders. This involves creating a clear link between pay and performance, engaging in a reasonable amount of risk, requiring appropriate executive ownership stake in the company, and enabling the executive talent to support and drive business strategy. Further, executive compensation plans should be fully compliant with all applicable laws and clearly disclosed so that shareholders can understand a company’s compensation decisions and logic. The Center believes that a company’s board is in the best position to create individual and customized compensation plans that are fair and reasonable.
During this period of increased regulatory action, the Center continues to advocate that each company’s board of directors is in a superior position to make these critical decisions affecting corporate governance and executive compensation. Accordingly, the Association and the Center will vigorously continue to advocate against any “one-size-fits-all” approaches.