DESCRIPTION:
Compensation Resources, Inc. (CRI) is pleased to provide the highlights of the results of our Survey of Private Companies - Economic Impact on Executive Compensation. The survey was distributed to gauge the impact of the current economic condition on executive compensation practices in privately-held companies, particularly as it pertains to year-end compensation actions. The survey questionnaire was distributed to potential participants in November 2008, with data collected through the early part of December 2008.
The past six (6) months have seen tremendous volatility in the stock market, oil prices have dropped considerably since its high point in July, and the financial services industry has suffered with bankruptcies, consolidations, and mass layoffs. The economic stimulus package for eligible Americans during the early part of this year did little to stimulate an already downward spiraling economy. However, the US Treasury's Troubled Asset Relief Program (TARP) is designed to create liquidity and reduce potential losses, while encouraging banks to begin lending again. TARP funds where created with the enactment of the Emergency Economic Stabilization Act of 2008, and banks that received funds are subject to certain requirements relative to executive compensation, including changes to deductibility of pay and limits on severance and change of control agreements. Although the regulations pertain to those institutions receiving funds, we can expect that some of these changes will be adapted to the rest of the corporate community.
