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00:00THE SEC HAD 61 OF THESE RULES TO WRITE, AND THEY PRIORITIZED THOSE. THE TOP ONE THEY WROTE WAS THE SAY ON PAY RULE. THEY RECEIVED A LOT OF COMMENT LETTERS, OVER 100,000 OF THEM. OLIVIA: IT SEEMS LIKE SUCH A MEANINGLESS METRIC, DEPENDING ON THE NATURE OF THE BUSINESS YOU ARE IN. MARTIN: INTERNATIONAL OR NOT. DAVID: A LOT OF PEOPLE SAID THAT TO ME WHEN I WAS TALKING TO PEOPLE ACROSS THE SPECTRUM. THE PUSH FOR THIS IS COMING FROM CONSUMER GROUPS AND FROM UNIONS. THERE IS MAYBE A POPULIST HUNGER TO FIND OUT MORE ABOUT THESE RATIOS. THE METRICS ARE DIFFICULT TO CALCULATE. YOU MENTIONED YOU HAVE EMPLOYERS WHO ARE BROAD, YOU HAVE PART-TIME WORKERS, SEASONAL WORKERS, AND TO FIND A MEDIAN WOULD MAKE SENSE. MARTIN: OUR ACCOUNTS, FOR EXAMPLE, YOU CAN GO BACK 10 YEARS AND YOU CAN FIND THEM BECAUSE YOU TAKE THE TOTAL STAFF, THE AVERAGE NUMBER OF PEOPLE. TOM: I WANT TO GO BACK 10 YEARS RIGHT NOW. LET'S LOOK AT MARTIN SORRELL'S COMPENSATION, A MAJOR DEBATE. TAKE THAT DOWN AND GET THE RIGHT CHART UP. WE SEE A MASSIVE IMPROVEMENT IN SHARE PRICE. IT IS CALLED PAY-FOR-PERFORMANCE. MARTIN: AND I KEEP IT ALL IN THE COMPANY. BRENDAN: ISN'T ALL PAY PAY-FOR-PERFORMANCE? MARTIN: 90% OF MY COMPENSATION IS INVESTED BACK IN THE COMPANY. TOM: MIKE EISNER , THINGS LIKE SEPARATION BETWEEN PAY AND CAPITAL GAINS TREATED EQUITY. DAVID: REALLY WHAT BOARDS CARE ABOUT HIS PERFORMANCE. YOU TALK TO SHAREHOLDERS, AND THAT IS WHAT THEY CARE ABOUT AS WELL. TOM: WHERE IS CAPITAL GAINS TREATED EQUITY INCENTIVES WITHIN YOUR REPORTING VERSUS THE NEW PAY, WHICH MARTIN SORRELL AND I KNOW IS BALONEY? HE DID NOT GET PAID $42 MILLION OR WHATEVER YOUR AD ON WAS. IT WAS AN EQUITY GAIN. MARTIN: 90% OF IT WAS CASH. TOM: YOU ARE WILLING TO TELL US, MARTIN, THAT 90% OF IT -- MARTIN: YES. TOM: WHAT WAS YOUR OTHER INSIGHT? DAVID: I AM STRUCK BY THE FACT THAT THERE HAS BEEN WIDESPREAD GROWTH IN THIS. IF YOU LOOK BACK AT 1983 UNTIL 2003, YOU SAW IT 46-1. NOW IT IS 33-1. HOW THIS GOT INTO DODD-FRANK AS WELL, THIS IS SOMETHING BARNEY FRANK CARED ABOUT FOR A LONG TIME AND TRIED TO WAGE IN. -- AND TRIED TO WEDGE IN. TOM: HERE IS THE MOONSHOT. MARTIN SORRELL BEGAN AT AGE 10 AT WPP SHINING SHOES. BRENDAN: DO BOARDS KNOW HOW TO PROPERLY VALUE CEO'S? MARTIN: IT IS NOT A QUESTION ABOUT THE BOARD. THE BOARD'S DECISION IS MADE ON A COMPARISON BASIS. THE WHOLE THING ABOUT THIS SORT OF -- IT IS NOT MAFIA -- IT IS THIS GROUP OF PEOPLE THAT OPERATE IN TERMS OF CONSULTING, COMPARISON, NETWORKS. THAT IS THE THING THAT PEOPLE WORRY ABOUT. MY VIEW IS THE COMPENSATION SHOULD BE TIED TO INVESTMENT IN THE COMPANY. NOT OPTIONS. YOU WOULD NOT GIVE -- THE RESTRICTING STOCK IS FAR THAT APPEARED BUT I BELIEVE, AND OUR EARLY PLANS -- INTERESTINGLY, THESE PLANS HAVE BEEN MIXED BECAUSE INSTITUTIONS DO NOT LIKE THE IDEA OF US INVESTING CASH. THE BEST WAY IS TO INVEST CASH IN A PLAN ON WHICH PERFORMANCE IS -- BRENDAN: THAT IS A PROBLEM WITH THE MORTGAGE MARKET FOR 10 YEARS. GETTING IN THE GAME MAKES YOU MORE CAUTIOUS. MARTIN: WHERE YOU HAVE A SEPARATION OF OWNERSHIP AND CONTROL IS WHERE YOU HAVE PROBLEMS. WHERE YOU HAVE MANAGEMENT INTEREST TIED INTO THE EQUITY OF THE COUNTRY -- OF THE COMPANY HEAVILY IN TERMS OF OWNERSHIP. DAVID: THE MORE DISCLOSURE YOU HAVE ABOUT EXECUTIVE COMPENSATION -- THESE BOARDS WANT -- TOM: DAVID GURA, THANK YOU. THE DOLLAR IS STRONGER THIS MORNING. THAT MEANS IT IS RIGHT TO DO A FOREX REPORT.

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SEC Set to Vote on CEO Pay Ratio Today

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