Aflac Inc. decided to adopt a say-on-pay advisory vote in 2007 and chief execuive Daniel Amos was surprised by the reaction. The chief executive approved of it, however, because it fit with the model set throughout the company's history of being a transparent organization. Amos stopped short of saying that the government should require all companies to give shareholders a say-on-pay, however, saying instead that companies should listen to their shareholders because they own the company. It will be interesting to see how much response the vote generates in the 2008 proxy after all the press it has been receiving.

The House of Representatives Oversight and Government reform Committee announced that it requested more information about how executive compensation consultants are utilized in executive pay determinations. The letter reporedly asks a series of questions about the compensation consulting process - particularly, if the company has used a consultant and (if so) if they also perform other services. The House has been looking into executive compensation for some time now after Chairman Henry Waxman commented that CEOs earn over 600 times more than the average company employee while 10% of a company's profits go to pay their salaries - something needs to be changed! Meanwhile, the SEC remains unhappy with the results of its latest requirements as very few companies managed to pass muster. It will be interesting to see how these two governing bodies act to control the problem.

Disney's CEO Iger inked a new contract with the company that will extend his tenure until January 31, 2013. The contract guarantees a bonus of $10 million from $7.25 million and grants him an option on 3 million shares, according to a filing with the SEC. Meanwhile, the value of Iger's long-term incentive award target was raised to $9 million from $9 million. For 2007, the executive received $27.7 million, which included a $13.7 million bonus and a $2 million salary plus stock options.

The chief executive became CEO of Disney in September 2005, following the questionable tenure of longtime chief executive Michael Eisner. Under his direction, the company has improved up until this latest quarter where net income increased by 24%. "Bob is a talented and visionary leader, under whom Disney has posted increases in growth and profitability that have consistently exceeded expectations," said Chairman John E. Pepper Jr.

The aftermath of the wreckage on Wall Street may be felt throughout the world, but it has definitely not hit the pocketbooks of those working on Wall Street. Wall Street bonuses totaled $33.2 billion in 2007, down just 2 percent, by the estimates of the New York state comptroller's office. Meanwhile, seven of Wall Street's biggest firms boosted their total compensation and benefits to a combined $122 billion, up 10% since 2006 desipte falling share prices in the company's through which they work! In fact, mortgage-related losses by several of these firms totaled $55 billion and wiped out more than $200 billion in shareholder value. The bonus figures represent the ingrained pay culture on Wall Street that leaves many with little choice to either pay up or lose top talent that can return big bucks in good times... it's a tough choice.

Fannie Mae is a company that experienced some adverse affects from the crash in the residential housing market, losing $1.4 billion in he third quarter alone. Regardless, the largest U.S. mortgage finance company announced its board's approval of President and Chief Executive Daniel Mudd's compensation package for 2007 that amounts to $12.2 million - a raise over his compensation in 2006 of $11.3 million. Shareholders also suffered from a dividend cut of 30 percent along with the sale of $7 billion in additional securites that will dilute ownership over time. Many are wondering how exactly the executive was able to make more in such a troubled environment as it did during the housing bubble of 2006... who knows.

The SEC sent out letters to 350 companies last summer critiquing the way they described the compensation of their top executives. Now, the SEC is reporting that they aren't happy with most of the answers that they received, and they are sending out a second series of letters. In the end, only 26 companies had their cases closed and of those 21 were cided for not giving enough information about the role of individual performance in their pay decisions.

Increasing scrutiny by the SEC could instill changes in how companies calculate compensation, including moving away from individual performance as a measure of success in favor of companywide financial targets such as earnings ro stock prices. The SEC discourages individual performance targets because they are difficult to quantify. It will be interesting to see if the SEC will take a tougher stance the next time around.

Delphi Corporation filed for bankruptcy nearly 27 months ago and unions have been bashing the automaker ever since. The brunt of their concerns were over the company's cash payouts earmarked for executives when it emerged from Chapter 11 bankruptcy. So, when a federal judge said last week that he would OK the bankruptcy plan only if the board agreed to substantially curtail executives' emergence cash payouts, many saw it as a victory for labor unions. The judge ruled that the company was unable to meet their burden and show that the $87 million proposed was a fair and reasonable amount. The executives are now slated to receive only $16.5 million. Many believe that it was the union that is largely responsible for bringing visibility to this issue and forcing the change.

La-Z-Boy Inc. (LZB) has been hit hard by the slump in the housing market and the overall decline in consumer spending. This means that the firm's top 120 managers might not get as much incentive pay since part of their compensation is based on three years of the company's earnings. Now, the board is faced with a decision to either face a mass exodus of talent or change up the company's executive compensation plan to give management another change. It's a difficult situation that will either alienate shareholders or management.

The board determined that the drop in LZB have made its stock awards program unrealistic and would not provide management with incentives during the three year period. So, the board decided to dump its long-term plan in favor of two short-term ones. Now, La-Z-Boy executives can earn 50% of their stock wards based on the company's performance from December 28th to April 26th (just four months!) and the other half in fiscal 2009 beginning in late April. Shareholders argue that changing the rules mid-game defeats the purpose of such programs...

A Watson Wyatt Worldwide poll found that a significant number of U.S. companies do not plan to disclose performance goals for their executive pay programs in their 2008 proxy statements. In fact, only 42 percent of companies plan to disclose the specifics while 31 percent have no plans to reveal goals at all! The SEC instituted the new disclosure rules effective in 2007 in order to provide investors with a clearer picture of executive compensation; however, the rules only request companies provide the information unless it would result in competitive harm.

"Setting sufficiently challenging performance goals and appropriate corporate performance metrics is an extremely important part of the executive pay process," said Ira Kay, global director of executive compensation consulting at Watson Wyatt. "The SEC has put significant pressure on companies to disclose their goals so that shareholders can determine if programs are paying for performance. However, companies are still struggling with the decision of whether to disclose this information."