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ARTICLE · 29 OCTOBER 2003

Confronting the Biggest Elephant in the Boardroom -- Executive Compensation

Jones Day
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Read a hypothetical memorandum on executive compensation from Mary Roe, General Counsel, to John Doe, CEO. It advises that a stay-the-course approach is unwise, as is an incremental one, and outlines a program for management to get ahead of the curve.

MEMORANDUM


To: John Doe, Chairman and Chief Executive Officer
From: Mary Roe, General Counsel
Subject: Confronting the Biggest Elephant in the Boardroom--Executive Compensation

Introduction

I have given a lot of thought to recent developments relating to executive compensation and what, if anything, we should do about them in the current environment.

I recognize, of course, the natural reluctance to deal with a sensitive topic in what continues to be a challenging economic environment, especially after we just went through the Sarbanes-Oxley process. Nonetheless, I don't think that a stay-the-course approach is wise. Nor is an incremental one. Instead, I think we should directly confront and get ahead of this.

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