Sixty-five percent of directors believe the U.S. executive pay model has contributed to superior corporate performance, compared with just 22% of institutional investors, according to surveys by Watson Wyatt Worldwide.
Of the 50 corporate directors surveyed, 61% said most executives are overpaid, while 48% think executive pay is too heavily influenced by management, according to a Watson Wyatt statement about the survey's results, released today.
But of the 55 CIOs and other top investment people at institutional investors surveyed, "90% think that executives at most companies are overpaid, and 87% believe executives have too much influence in how their pay is determined."
Both groups favored pay for performance. About 60% of directors and institutional investors favored targeting long-term incentives above the market median, the survey found. But the investors think "severance or change-in-control agreements should be positioned below the market median," the statement said.
More than three-fourths of both directors' and institutional investors' groups favor enhanced disclosure of executive pay information in proxies.
Overall, 79% of the directors and 85% of institutional investors believe the executive pay model has hurt corporate America's image.
Both surveys were done earlier this year.
