The Directors & Boards survey: CEO and director compensation 2011: directors are reporting a higher satisfaction level that CEO pay is indeed reflecting performance against stated objectives.

• Author: Shaw, David
• Position: SURVEY ON EXECUTIVE AND DIRECTOR COMPENSATION

OUR LAST CEO AND DIRECTOR compensation survey elicited a number of responses that worried that the issue of executive compensation was more of a popular political and media issue rather than a real problem. That said, many directors were cognizant of the disconnect "between the performance that the board pays for and how performance is understood by observers," as one director astutely put it.

CEO Compensation

At your primary company, what was the total earned (vs. target) CEO compensation, including salary, bonuses, long-term compensation, benefits and perquisites for the latest full fiscal year? 18% Less than $250,000 28% $251,000 to $500,000 13% $501,000 to $999,000 16% $1 million to $2.5 million 11% $2.6 million to $5 million 5% $5.1 million to $7.5 million 4% $7.6 million to $10 million 5% Morethan $l0 million Was this total compensation: 48% About the same as the previous year 40% Higher than the previous year 10% Lower than the previous year 2% Other Has say on pay affected your company's approach to executive compensation? 77% No 17% Yes, somewhat 4% Unsure 2% Yes, significantly What percent of your CEO's pay package is cash compensation (salary and bonus) as opposed to long-term incentives and perquisites at your primary company? 30% Less than 50% 16% 51-60% 10% 61-70% 8% 71-80% 10% 81-90% 6% 91-99% 20% 100% As a board member, do you feel that CEO compensation for your primary company is generally: 74% Approximately correct 16% Too low 8% Too high 2% Other If you were recruiting today for a new CEO, would you expect to: 47% Pay the same amount as you do now 34% Pay somewhat more than you pay now 11% Pay significantly more than you pay now 7% Pay less than you do now Interestingly, in comparing results between last year's survey and the one you're reading, more directors were satisfied this year that the level of CEO compensation accurately reflected performance against stated goals and objectives. More were also satisfied that their compensation plans for top executives were in line with company performance and expectations and that CEO and executive compensation was tied directly to sustaining and increasing shareholder value.

So perhaps last year's heightened media and political visibility on executive compensation had some effect on compensation plans this year. Or, perhaps, most compensations plans were already working well and were just hidden by visible and controversial outliers.

We asked what one thing directors would...