CBS Corporation announced today that it had reached an agreement with chief executive Leslie Moonves to chop his cash compensation while expanding his equity stake in the company. His compensation will now be just $3.5 million a year; however, he will be eligible for "significant equity compensation" and bonuses tied to the performance of CBS stock. The new agreement also expands his role from the prior 2009 deadline to 2011 now. CBS declined to say why these changes were implemented now, but they come after much shareholder criticism. Some still have concern, however, that the performance bar for bonuses and equity compensation may be too low. However, this is definitely a move in the right direction.

Insurance companies may be tightening their budgets going forward, but executives certainly aren't feeling the pain. Since the major hurricanes of 2004 and 2005, many executives have enjoyed huge increases in compensation stemming from strong performance. However, this compensation has not declined since insurance companies have begun cutting back in today's more difficult environment. State Farm, for example, announced that it was dropping coverage for around 2,600 policyholders while CEO Edward Rust received $11.7 million this year compared to $5.5 million in 2004. Similarly, Alfa Insurance dropped 4,600 policyholders while its CEO received $1.7 million this year - a 25% increase year over year.

A new book entitled "Myths and Realities of Executive Pay" by Ira Kay argues that executive compensation may be fair after all. Kay believes that executive compensation is the reason for - in no small part - the rise of the Dow Industrial average, which stood at 5,000 in 1996, to well above 13,000 now. These high compensation amounts motivate executives to make difficult decision like move offshore and sell off businesses. After all, without compensation to align the interests of shareholders and management we would likely see more businesses that are run by families or majority shareholder control - that is, those that are resistant to positive change that would generate shareholder value. Now, whether the compensation also makes executives act with a more short-termed outlook is another topic entirely. Perhaps companies should start issuing LEAPS or restricted stock to executives instead of short term options that they can sell off in just a few months.

Michigan Senator Carl Levin is widely credited with doing the most to pad the paychecks of America's top executives. He was the man behind the single biggest factor influencing the stock option explosing in the 1990s - the change in the tax code that limited the tax deductibility of executive pay to $1 million unless that pay was "performance based". Since stock options are based on the appreciation of the underlying stock, it is considered a performance based alternative to cash. As a result, the issuance of stock options soared which has led to the spectacular increases in compensation seen during the past few years.

Last week, the Senator proposed another bill that would include stock options under the $1 million cap while also raising taxes on options grants generally. His theory is that this will net the treasury $5 billion a year. Sound familiar? It is nearly identical to the theory behind the past changes in executive compensation tax laws. However, instead of reining in compensation and increasing the tax rake it actually ended up in more compensation via other methods which ended up paying even better. The lesson: Corporations do everything they can to avoid taxes.

Countrywide Financial CEO Angelo Mozilo sold truckloads of stock just before the subprime market collapsed. The chief executive started a plan in October 2006 in which he raised the number of shares that he could be sold twice, once in December 2006 and again in February - both at near all-time highs. Many investors are questioning whether or not these sales were fair or whether it was a case of good old-fashion insider trading.

Mr. Moore, the treasurer of North Carolina, recently wrote the SEC asking that the agency look into the sales, "As an investor and a Countrywide shareholder, I was shocked to learn that C.E.O. Angelo Mozilo apparently manipulated his trading plans to cash in, just as the sub-prime crisis was heating up and Countrywide’s fortunes were cooling off."

Whether or not any of these accusations can be proven remains to be seen, but the SEC is likely to at least look into the matter following the request by Moore. The case also brings into question what exactly is considered fair practice when it comes to buying and selling of company stock...

The Securities and Exchange Commission says that corporations are falling short of their requirements to explain to investors exactly how executives are being compensated and for what work. Officials completed their first review of the new pay disclosure rules yesterday and called on corporations to give ivnestors more insights into how they make compensation decisions and to ensure that proxies containing pay votes are very clear and understandable. Meanwhile, boards of directors could also be doing a better job in discussing exactly how they choose performance targets, severance packages and peer companies that they use for comparison. In the end, the SEC stated that they found a lot more disclosure but a severe lack of analysis. That is, while companies are disclosing all the appropriate numbers, they fail to explain to investors exactly why executives are earning the compensation that they receive.

The SEC has also kept extremely busy reviewing these compensation reports over the summer. In fact, over 250 letters were sent asking that companies provide additional explanations and data; however, most of these were requests that companies keep these things in mind for the future instead of amend existing filings. In the end, this year is more of a testing phase for companies to get use to the rules before they are strictly enforced by the SEC. Regulators are expected to start cracking down on companies omitting disclosures next year - particularly those that do not give or explain performance targets or give any context to how difficult the goals are to achieve.

Sprint Nextel Chairman and CEO Gary Foresee has stepped down after two years over overseeing the $35 billion merger. The company announced that CFO Paul Saleh will fill his shoes as acting CEO while the company searches for a new leader. The news comes after both internal and external pressure for a new chief executive following the company's recent lackluster performance.

"The board's search for selecting its next chief executive will focus on candidates outside the company," said a company spokesperson. "We fully expect that the search will be concluded in a timely manner and we are focused on selecting the right candidate to guide the company to achieve its full potential. Sprint Nextel has the assets, spectrum, customer base and technology to be the leader in wireless mobility services."

Two executives at Research in Motion (RIM) will pay another $2.5 million each as part of a tentative settlement reached with one of its shareholders over the company's option granting policy. The Blackberry-maker said Friday that it had reached that agreement with the Ironworkers Ontario Pension Fund, which launched legal action earlier this year. The fund had been seeking $105 million in damages. The $2.5 million today comes on top of the $5 million they've each already agreed to repay to the company to defray its costs for conducting the investigation. The two men continue to share the title of CEO and hold significant shares, but stepped down as Chairman of the Board.