Linking Pay To Performance Without The Fuss

Your annual review of executive compensation ("Executive pay: The party ain't over yet," Cover Story, Apr. 26) noted that some boards of directors have begun to give executive pay tougher scrutiny. The $47 billion New York City pension funds have been working to make boards more independent so they are better able to link pay and performance.

This year, the funds sponsored shareholder resolutions at four companies calling for a compensation committee made up solely of independent, outside directors, with access to outside compensation consultants. The four companies were Bally Mfg., W.R. Grace, Polaroid, and USF&G. Instead of battling us at the Securities & Exchange Commission or at annual meetings, the companies accepted the proposals without a vote and are forming independent compensation committees. I urge other companies to adopt this reform without waiting for a resolution to be filed.

A strong, independent board can play a vital role not only in linking pay and performance but also in helping management achieve good performance.

Elizabeth Holtzman


City of New York

New York

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