Roundtable survey finds clear trends.

• Author: Marshall, Jeffrey
• Position: Executive pay

Corporate governance--and especially the red-hot topic of executive pay--has apparently been on the agenda of many boards, and practices are changing. A recent survey by the Business Roundtable, an association of CEOs of 160 leading U.S. companies, of governance practices among its members showed continuing improvements, including a continual rise in the percentage of companies that have increased pay-for-performance for senior executives.

The survey's key findings include:

Pay for performance: Almost 6 out of 10 companies (57 percent) reported an increase in the pay-for-performance element of senior executive compensation in the past year, compared to 49 percent in 2005 and 40 percent in 2004. Of the companies placing more emphasis on performance, 20 percent indicate that the performance element includes primarily long-term goals, 73 percent stress a mix of long- and short-term performance goals and only 7 percent stress short-term goals.

Board independence: Ninety-one percent of respondents have an independent chairman, lead director or presiding director--up from 83 percent in 2005 and 71 percent in 2004. The percentage of companies with an independent chairman has continued to increase, from 4 percent in 2004 and 9 percent in 2005 to 11 percent in 2006.

Executive session: Almost 7 in 10 (69 percent) of companies reported that independent (non-management) directors met in executive session at every board meeting in 2005, and 75 percent expect the same for 2006. This percentage is up from 68 percent in 2004 and 55 percent in 2003.

Director evaluations: Thirty-eight percent of companies performed individual director evaluations in 2005, and 45...