Corporate governance experts believe Wal-Mart Stores’ recent decision to tie executive bonuses to compliance objectives could be a bellwether for how other large, multinational companies hold management accountable should their firms run afoul of certain regulations.
The retail giant has undergone an overhaul of its compliance operations following a federal investigation into bribery allegations in Mexico last year, and has recently added provisions to its executive incentive compensation program that will tie bonus payments to compliance objectives, according to a proxy statement released on April 22, 2013…
Compliance-based objectives have already been adopted by heavily regulated industries such as financial services and pharmaceuticals, but are rarely seen in other American industries, says Alan Johnson, a financial services comp expert and managing director of Johnson Associates.
Johnson says that it could be difficult to be very specific and objective toward exact compliance standards and goals, as many of the regulation and compliance issues could be seen as politically motivated.
May 13, 2013