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CFA Institute urges better executive comp disclosures

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20 Feb 2008

The CFA Institute Centre for Financial Market Integrity has published a study 'It Pays to Disclose: Bridging the Information Gap in Executive Compensation Disclosures in Asia' that finds that prevailing disclosure regulations and practices in Hong Kong, Singapore, and Japan "leave room for questionable pay arrangements to continue or escalate in the future, and potentially harm corporate value and investor confidence".

The study found that five factors "conspire to render Asian markets vulnerable to pay abuses":
  • lack of regulatory push,
  • inadequate information in financial reports,
  • little use of long-term incentive plans,
  • poor board oversight, and
  • lack of investor influence on companies' executive compensation.
The study (PDF 358k) calls for both voluntary corporate disclosures and stronger disclosure requirements. Press Release (PDF 47k).


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