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A leading US business group called Monday for new guidelines governing executive compensation that would establish a "clear link" between pay and performance.
The Conference Board's task force on executive compensation said in a report that new practices are needed "to restore credibility and increase trust in pay practices and oversight."
The report comes days before a summit of the Group of 20 leaders where executive pay and bonuses is expected to be a hot topic, with pressure to curb outsized compensation linked to risky financial practices, especially among banks.
The Conference Board said public companies and institutional shareholders "should take meaningful action to restore the trust that has been lost during the economic crisis."
"Shareholders of American companies and the public deserve to see executive compensation programs that serve shareholders' interests and are explained to shareholders in thoughtful dialogue," said the report from a committee chaired by Robert Denham and Rajiv Gupta.
The report called for "guiding principles" to establish a "link between pay and performance, adopting best practices, eliminating controversial practices, demonstrating effective board level oversight of executive pay, and ensuring transparency and an appropriate dialogue between boards and shareholders regarding executive compensation."
