SOURCE: The Corporate Library

July 31, 2008 16:27 ET

Two Years Later -- Many Companies Now Receive Passing Grades but Some Still Pay for Failure

PORTLAND, ME--(Marketwire - July 31, 2008) - A new report from The Corporate Library, the leading independent source for North American governance research and risk analysis, finds that although many companies have made improvements, two companies -- Merck and Safeway -- have failed to make significant changes to compensation governance and policy. The report is The Corporate Library's latest assessment of the effectiveness of compensation policy at the companies identified in its first Pay For Failure report, published in March 2006.

Of the nine companies profiled, perhaps the most sweeping changes were introduced at Home Depot and Pfizer, developments made simpler because of changes in CEOs. Nine of the 11 companies in the original study were analyzed in this update, because Lucent and BellSouth had been acquired since the original report's publication. In addition to Merck, Safeway, Home Depot and Pfizer, the other companies examined include AT&T, Hewlett-Packard, Time Warner, Verizon and Wal-Mart.

Some of the compensation policy changes include: the introduction of clawback provisions, moderation of severance benefits, and increases in the proportion of pay tied directly to performance. The updated report also examines changes in the companies' fortunes, looks at major acquisitions and divestments, governance changes, turnover in compensation committee membership, and shareholder proposals, all covering the years 2006 through 2008.

The detailed 35-page report, entitled Where Are They Now? An Update on Compensation Policy at the Original 'Pay For Failure' Companies is available for $125 from The Corporate Library's online store at www.thecorporatelibrary.com. An Executive Summary containing report highlights is also available for $45.

About The Corporate Library

The Corporate Library is an independent research firm focused on the U.S. and Canadian public market which offers corporate governance information products, research services and data products. It produces the definitive ratings of U.S. corporate boards of directors, allowing businesses that subscribe to the service to evaluate governance as an element of risk. Additional information can be found at www.thecorporatelibrary.com.

Contact Information

  • Contact:
    Cheri Grimmett
    Media Relations
    The Corporate Library
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    207 553-5604