"You just kind of have to do some analysis of why that change was made. Is the actual change a good one?"
Mr. Michael McCauley, identified as the Corporate Governance Officer of the Florida State Board of Administration, quoted by Jonathan D. Glater, "Companies Reset Goals For Bonuses" p. B1, col. 6 (New York Times Nat'l Ed., "Business Day" Section, Saturday, April 18, 2009).
Bonuses are still the favored way to compensate people who work at corporations, particularly on Wall Street. See Jonathan D. Glater, "Companies Reset Goals For Bonuses" p.B1, col. 6 (New York Times Nat'l Ed., "Business Day" Section, Saturday, April 18, 2009). The linked newspaper report advises that since most corporations are not increasing revenues, bonuses are no longer dependent on revenue growth. Bonuses are still being paid, however, although pay for performance of what, exactly, seems at least open to question. See id.
Compensation committee members should have their own questions, clearly, including whether the suggested bases for bonuses at their corporations supports their own Fiduciary Duties to shareholders.
And whether these same compensation committee members would, or would not, have a good claim to Insurance Coverage if and when their conduct in awarding bonuses is challenged in the future.
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