The New Center on Executive Compensation: a Q&A

There's a new player on the block in executive compensation issues.

Recently-formed, the Washington-based Center on Executive Compensation says it pushes for reasoned, nuanced views on such hot-button issues as proposed "Say On Pay" legislation, regulation and other matters. The center is an offshoot of the HR Policy Association and is supported by more than 30 high-level human resources executives including such firms as McDonald's Corporation, IBM and American Airlines.
To find out more, I called Tim J. Bartl, the center's vice president and general counsel, who gave me this brief interview:

What is your concern about exective compensation?
"If you look in other media coverage around the issue, you'll often see the perspective of shareholders or activists and occasionally a business association for an individual company. There is no one out there who provides a consistent perspective especially from an HR point of view. That's important because the HR officer plays a very important role in the executive compensation process. They work with the compensation committee and consultants. They have an important role and a voice. That is where we think we can bring a reasoned perspective to bear."

What is a reasoned perspective?
"It is factoring in overall purposes of compensation that are generally consistent with our principles on compensation. It needs to be aligned, performance based, fully compliant with applicable laws and regulations, taxes and benefits. Independent pay must be independently formed and approved. As well, outside advice must be free from conflict and appropriately customized that takes into consideration the company's culture, values and business strategy. It must be transparent and accessible. Finally, it must be clear andf reasonable, by that we mean that by the end of the day executive compensation as a whole, is packed in the best interests of shareholders, executives, employees and others."
Is your group an alternative to the harder-line Business Roundtable?
"The bottom line is we have developed our principles. Look at the projects we are pursuing for the kinds of approaches we are taking. We'll be allied with certain organizations and in other cases, we won't be. 'Say on Pay' and a mandatory shareholders' vote do not make sense for many careful reasons. Chief among them is that the vote is going to by definition effectively require the board to react. While we think that executive compensation disclosure has been a very good thing, there are issues the board must take into consideration and it may be competitively sensitive information. Even if the vote's non-binding, there will be a reaction."

What is the status now on pushing 'Say On Pay' legislation, notably the bill by Senator and presidential candidate Barack Obama?
"Hard to tell at this point. It has passed the House. So far this year, votes have been less robust than expected."