The Crackdown Continues

Amid an explosion of proposals to limit and regulate executive compensation, public-company finance chiefs face a double whammy: the prospect of new constraints on their own earnings and new responsibility for providing an unprecedented level of disclosure about compensation in financial statements.

In addition to providing numbers — typically a table listing the compensation packages of the five top executives — the report would also have to explain the objectives behind the structure of any incentive-pay schemes that might have an impact on the company's risk management. "The idea is that transparency will put the brakes on bad behavior," says Ann Graham, professor of law at Texas Tech University's law school.

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