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Volume X of the online Board Governance Series features an esteemed panel of governance experts. Two of the chosen topics leverage the expertise of Bob Romanchek, principal and senior execute compensation consultant with Hewitt Associates.
The first topic Bob addresses, titled: "Director Compensation: Past, Present, and Future," discusses the history and critical developments surrounding director compensation. Compensation packages are going up, but not in proportion with executive compensation. Some large organizations are structuring compensation programs that are similar to executive compensation plans, and contain items including:
- Paying fairly for a job well done.
- Aligning interest with shareholders.
- Simplifying plans to make them easier to understand.
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The second topic Bob addresses, "What Compensation Committees Must Know about the Business Judgment Rule," discusses the nuances of the business judgment rule and how it applies to the compensation committee. When making executive compensation decisions, outside directors need to proactively collect and examine data to make informed decisions that are not self-serving. This ensures the directors' compliance with the current business judgment standard and is in the best interest of the organizations they represent.
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The Board Governance Series, a collection of informative commentary from the nation's experts in corporate governance, is hosted by Corporate Board Member® Magazine and The NASDAQ® Stock Market.
About Our Expert
Robert A. Romanchek, J.D., M.B.A., C.P.A., is a principal, consultant, and manager at Hewitt Associates with more than 20 years of experience. He also is a member of Hewitt's Executive Compensation Leadership Council, who manage Hewitt's global executive compensation practice.
Bob has recently spent considerable time consulting directly with the compensation committees of various boards on executive compensation issues relating to corporate governance, executive compensation philosophy development, capital structure change transactions, private equity buyouts, long-term incentive design, outside director pay, bankruptcy confirmation, and proxy disclosure. Bob has authored numerous articles. He also authored a chapter in a recently published book entitled "Executive Compensation Issues in Spin-Offs, Divestitures and IPOs."
Bob is an attorney and a Certified Public Accountant. He is a graduate of the DePaul University College of Law, and also holds an M.B.A., cum laude, from the DePaul University College of Commerce. His undergraduate degree is in accounting and economics.
