the average amount of
current compensation
that comes from base
salary; 37.2% comes
from incentives.
performance,” said a director of
commercial leasing at a Northeast-based development company.
When asked if there was
increased shareholder/investor
oversight of executive pay, 60.1% of
those polled stated there was not, a
response that surprised Saitta, who
said that he is seeing more companies closely examining the issue of
executive pay. “We’ve found in
both public and private companies, everybody is really focusing on it and trying to make sure that pay is aligned with per-
formance,” he states.
LoPinto agrees, saying the overwhelming negative response is not
reflective of what is happening in
the industry. “Particularly on the
public side, there is going to be an
increasing level of scrutiny of executive compensation,” he says. “It
may not necessarily translate into
them making less money, but it’s
going to have an impact perhaps on
the blend of compensation and how
it’s accounted for.”
say their firms have instituted a pay-for-performance policy for senior
management; 52.7% is
based on a combination of
long- and short-term
goals, 72.1% is in the form
of a monetary payout.
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Indeed, there was anecdotal evidence
that executive compensation is being
more closely examined.
“After hearing and seeing national
news citing what seems to be excessive
compensation for top-tier management,
it’s only natural that there would be
more scrutiny by shareholders,” said an
associate with a brokerage firm in the
Southeast.
“Investors want sound investment decisions and aren’t going to penalize executives because the economy has taken a
downturn,” said one VP based in the
Southwest. “That said, companies that
based their performance on leveraged
returns should
expect greater
scrutiny by
investors.”
A president of a
development
firm working
in the
Southwest
stated that
say they are not seeing
increased scrutiny on
executive compensation
by shareholders and/or
investors.
“financial
partners are monitoring the overhead
allocations relative to total project costs.
Salaries are the largest component of
company overhead.”
And the phenomenon of heightened
examination of executive pay is not limited to firms whose stock is traded publicly. “We’re not a public company, but
[executive pay] is reviewed internally,”
said the HR director at the Midwest
engineering firm.
When queried about whether their
firms’ pay structures tracked those of
similar organizations, 67% answered in
the affirmative. “Folks leave if it is not,”
pointed out a Northeast-based senior
financial analyst with a development
firm.
Although not in the majority, some
participants admitted their current firms
lag the industry as a whole. “Four years
ago, salaries were slightly above (10%)
