July 2010

Internal Audit's Say on Pay

From CFO.com.

Plenty of groups are looking harder at executive compensation. Is your internal audit department one of them?

There's no question that executive compensation has come under the microscope recently. Since December companies have been dealing with new Securities and Exchange Commission requirements regarding various proxy disclosures about pay. SEC staffers have been asking for ever-more detail about compensation decisions for each executive named in the proxy. Now, new compensation-related rules are coming down the pike, thanks to the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law Wednesday by President Obama.

As companies increasingly open up to the investing public, though, they may not be doing enough behind-the-scenes work to make sure their compensation practices are truly in line with the philosophies they are espousing. Fewer than half, or about 45%, of the internal auditors responding to a recent Institute of Internal Auditors (IIA) survey report that their company performs some type of internal review of executive compensation and benefits. And even those firms may not be going far enough, say industry experts.

Read more.