Executive Pay Expected to Rebound This Year,
Towers Watson Survey Finds
Survey Also Shows Executive Retention a Growing Concern for Employers
July 29, 2010 09:13 AM Eastern Daylight Time
NEW YORK--(EON: Enhanced Online News)--Compensation for executives at large and midsize U.S. companies
is expected to rebound modestly this year following two consecutive years of pay declines, according to a new
survey by Towers Watson (NYSE, NASDAQ: TW), a global professional services company. Additionally, most
companies are planning to fine-tune their executive pay programs to further tighten the link between pay and
performance as well as address a growing concern over executive retention.
Nearly half (49%) of the 251 companies surveyed expect to increase funding for annual bonuses for executives this
year, while one-third (33%) either have made or expect to make larger long-term incentive grants (dollar-wise) this
year versus last year. However, the survey results suggest that most companies remain cautious about spending.
Most (53%) of the companies increasing bonus funding are projecting relatively modest increases of 20% or less,
while more than two-thirds (69%) of the companies making larger long-term incentive grants said the dollar value of
their grants will increase by 20% or less.
“For many companies, the economic recovery brings improved financial performance and greater flexibility to pay
larger annual bonuses and long-term incentives grants,” said Doug Friske, head of executive compensation consulting
at Towers Watson. “However, the survey findings also reflect the unevenness of the recovery and underscore the
fact that many companies continue to struggle to regain momentum in a challenging environment.”
The survey found that companies plan to fine-tune their executive pay programs, and particularly their incentive
plans, in the wake of continuing pressure to better align their programs with business performance. Nearly two-thirds
of respondents (66%) reported making some change to th