The backlash against excessive executive compensation reverberating out of the current worldwide financial crisis has heightened interest in what was already a very hot topic. Stories of huge golden parachute payments being made to executives of companies that went under or were rescued at the last minute are commonplace. Add to that the increasing realization that the massive pay packages of many Wall Street executives during the recent boom years resulted from risk taking that in hindsight has proven to be excessive. The result is a combustible brew of politicians, regulators and shareholders braced for a fight.

The current focus on executive compensation has been building for years, long before the latest excesses came to light. The Securities and Exchange Commission’s 2006 proposals to make executive compensation disclosures more transparent and to require a new compensation discussion and analysis in proxy statements received more than 20,000 comment letters from the public, the most in the history of the SEC. “Say on pay” shareholder proposals-nonbinding advisory votes on compensation issues-were the most prominent issue during the 2008 proxy season, which was largely completed when the most severe financial dislocations of this fall began. Executive compensation clearly has been high on the hit list of corporate governance activists in the last few years. But until recently, an ever-expanding economic pie took some of the urgency out of the cause.

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