The House Oversight and Government Reform Committee is asking compensation committee chairmen from each publicly traded Fortune 250 company how they use consultants to set executive pay. In letters to the chairmen, the committee asks companies that use compensation consultants whether those companies pay the advisers to provide non-compensation-related services, such as benefits administration or actuarial services.
In a report released in December, the committee said that compensation consultants could have a conflict of interest if they are also paid to provide non-compensation-related services. The report, based on confidential information provided by consultants, claimed that more than 100 of the Fortune 250 companies used consultants that provided both executive compensation advice and other services to the firms at the same time. “In many cases, the consultants hired to provide executive compensation advice were paid millions of dollars by the executives whose pay they were supposed to assess,” the report said.
