Recall that the Dodd-Frank Act required public companies to hold say on pay votes on compensation packages of the top executives and golden parachutes.

These votes, while non-binding, generated a lot of criticism as well as support, as boards complied with the rule, which go into effect for the most recent proxy season. Recall also that smaller companies were given a two-year reprieve.

So how did the first year go? A new survey from BDO has found that nearly 80 percent of board members do not think the new requirement made it easier to manage the compensation of their top executives. More than 90 percent of compensation committee members think the rules have not helped them manage compensation. Most boards apparently feel the vote brings an extra degree of scrutiny to a process that they say is already rigorous. More than 70 percent say they do not want to spend more time on compensation issues. Moreover, more than 80 percent of board members "believe shareholder criticism of executive compensation frequently suffers from 20/20 hindsight."

It's easy to criticize pay policies in the wake of corporate implosions or troubled times. And shareholder advocates sometimes fail to realize exactly what the compensation committee does as it formulates policies. But all this calls for more education, not less. It calls for a proactive approach to communicating what the goals and design of the plan are all about. There are many areas where compensation committees would do well to be more proactive from a communications point of view. If you do not define your plans, your critics certainly will.  

For more:
- here's the release

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