Chief Executive Officer pay finally seems to be slowing down, according to a preliminary survey of CEO compensation released on Monday. The survey, which took proxy data filed through March 23, 2007, covered more than 1,000 large US corporations and found that the median pay for CEOs in 2006 rose only 9.3%. This compares to a 16% rise in 2005 and a 30% rise in 2004. While the pay is still high, it marks the first time since 2002 that CEO pay has risen in only the single digits. Whether or not this is a result of increased disclosure remains to be seen, but it appears that pay is finally moving in the right direction.

GE, Lilly, and SunTrust all failed new SEC rules that require companies to eliminate jargon when explaining how they pay their top executives. According to a study that SEC Chairman Christopher Cox cited in a speech last month, these companies along with 40 others didn't write annual pay reports in "plain english". The study - conducted by Clarity Communications - examined the sentence lengths and types of words used in the companies' financial statements. GE scored a 16.41 on its index, whereas Lilly received a 16.07, and SunTrust received a 17 - the highest possible score. As a basis for comparison, articles in Reader's Digest score right around an eight.

The SEC's executive pay rule overhaul that went into effect in July promised investors that companies would provide "intelligible disclosure that can be understood by a lay reader". While the SEC won't make the companies resubmit their proxy statements, Cox said they would take a tougher stance next year. The Chairman noted, "We have far to go before we can say that legalese and jargon have truly been replaced by plain English." Hopefully over time things will improve to a point where executive compensation finally becomes a transparent disclosure for all investors to review.

The Wall Street Journal released a report questioning whether or not it pays to tell investors extra compensation details. The articles argues that these moves aimed at eliminating investor complaints may backfire by generating increased suspicion over pay packages. Case in point: El Paso. The company offered investors a one-page profile for each of its top officers, featuring a photo, biography, equity grants, and pay highlights. However, the company is still facing criticism from investors who complain that the profile leaves out total compensation while the profiles are "more prominantly placed than they should be". Still, other companies are exceeding the requirements by disclosing specific performance targets for executive bonuses and grants, which is a strategy yet to come under fire from activist investors.

So, are these new executive disclosure rules helpful for the average investor? While they may appear much more helpful on the surface, they tend to hide a multitude of other problems just below. Between negative total pay disclosures, stock option reporting rules, and the variety of presentation formats, the disclosures can be difficult for the average investor to decipher. Ultimately, most investors are simply looking for specific performance targets and accurate total compensation amounts - perhaps the SEC will eventually amend its disclosure rules to make these two variables more apparent than they are now.

A House panel on Wednesday approved legislation written by majority Democrats to give shareholders at public companies a formal say in executive compensation packages. The proposal gives shareholders a chance to cast a nonbinding confidence or no-confidence vote on executive pay plans, allowing them to either ratify or disapprove of them. The move follows a challenge issued by President Bush earlier this year, saying that company managers and directors must step up to their responsibilities. Some are speculating, however, that the move could force more qualified executives out of the public sector and into the much more secretive and high-paying private world. Regardless, this is definitely a situation worth watching closely as it may significantly affect the corporate world in the coming years.

Bob Nardelli, former CEO of Home Depot (NYSE:HD), has been offered a new job at the private equity fund Cerberus Capital even after his questionable tenure at the Home Depot. While the CEO's reputation in the public sector may be forever tarnished, there are apparently many opportunities in the private equity world for experienced managers. Many private equity firms are looking for seasoned managers to run companies in their portfolios, seemingly regardless of their history. Bob Nardelli was ousted from Home Depot late last year after investors balked at his refusal to address their concerns about underperformance, extensive golden parachute and compensation while investors were losing millions, and his inability to effectively deal with the press. Given the secrecy and deep pockets of private equity, perhaps this is where future high-calibur CEOs will be drawn, which will likely end up increasing the amounts that public companies will be forced to pay to keep talent onboard. An interesting development, indeed...

The Financial Accounting Standards Board (FASB) has agreed to give the Securities and Exchange Commission (SEC) more say in the process governing appointments to the group, which sets accounting rules for thousands of public and private U.S. companies. The move was first outlined in a recent letter to SEC Chairman Christopher Cox but the SEC's role is not clearly spelled out. Many investors are hoping that the FASB will work towards reducing the number of arcane rules that are causing some U.S. companies to move offshore in order to save on costs. While the new arrangement with the SEC is far from perfect, investors now know who can be held accountable if positive changes aren't made. The main argument, however, is that changed appointments may raise the risk of political interferance; after all, it's not unheard of for Congress to muscle the FASB into making changes (read: options). Whether or not there will be problems remains to be seen; however, this is definitely an important development that investors should watch carefully.

The Supreme Court made it harder today for whistle-blowers to share in the proceeds from fraud lawsuits against government contractors. The False Claims Act enabled individuals acting on the government's behalf to file fraud lawsuits against companies that do business with the government. Upon favorable ruling, they would then receive a portion of what the contractor must pay the government. The problem occurs once allegations aer disclosed publicly since people could simply read a newspaper account or indictment then rush to the courthouse to file a suit. Now whistle-blowers must show that their information led the government to the fraud, although not necessarily that the claims ultimately proved to a jury must also have come from them. Overall, this case should not inhibit whistle-blowers, but rather prevent people from trying to take advantage of the situation.

General Motors (NYSE:GM) urged shareholders to reject all ten shareholder proposals for its June 5th annual meeting and to re-elect its current slate of directors. Interestingly, the shareholder proposals included things such as required disclosure of political donations, cut emissions of greenhouse gases and an easier process for smaller shareholders to elect directors. There is also an executive compensation proposal on the table, whereby 75% of all stock options and grants given to executives would have to be tied to a performance metric. The company did not comment on their reasoning behind their recommendations yet; however, they are due to explain themselves in their upcoming proxy filing in April. Meanwhile, many investors are questioning why companies are being so evasive when it comes to executive compensation and increased transparency - clearly, these measures are best for shareholders.

Gary Gerhardt, the former CFO of Engineered Support Systems, Inc., has been indicted on charges of participating in a scheme to backdate stock options between 1996 and 2002 according to federal prosecutors. The former CFO is being charged for 10 counts of fraud after he allegedly personally made $1.9 million in profits from the scheme. The man is the second former executive of the company to face charges, after Steven Landmann - the company's controller - plead guilty on March 16th.