Risk and Reward Debate Heats Up

The debate over incentive compensation plans role in excessive risk taking at major corporations is heating up.  In today's Wall Street Journal, an article provides a good overview of both sides of the debate and what companies can expect from potential government regulation.

"There's not an easy cause and effect relationship" between pay and risk, says Don Delves, a Chicago compensation consultant. "We don't know how to do it yet."  Nonetheless, federal officials want companies to try. Treasury Secretary Timothy Geithner Wednesday recommended companies assess pay packages to discourage "imprudent risk-taking." Soon after, Securities and Exchange Commission Chairman Mary Schapiro said the agency is considering requiring companies to disclose "how compensation impacts risk-taking" in annual proxy statements.

Is your company prepared to assess risk associated with pay packages?  Wheelhouse Advisors can help.  Visit www.WheelhouseAdvisors.com to learn more.