Despite many companies in North America anticipating a decline in shareholder value in 2011, pressures about executive pay by the Occupy movement and a slow-to-recover economy, a majority of companies expect to pay executive bonuses that are as large as or larger than last year’s awards. Additionally, the majority of companies plan to fund this year’s bonuses at or above target levels, reflecting strong operating results, according to the Towers Watson survey.
“Given that many companies have seen strong financial results this year, it’s no surprise that the majority of companies will fund their incentive pools at or above target levels,” says Doug Friske, global head of executive compensation consulting at Towers Watson. “However, for companies that must submit their pay programs to a shareholder vote, the prospect of above-target incentive awards combined with shareholder losses could pose complications and communication challenges as they head into the 2012 proxy season.”
