Watson Wyatt Worldwide - HR Finance Alert

CEOs at Best-Performing Companies Receiving Compensation Above Target

Executives at high-performing companies realize greater compensation than counterparts at underperforming companies. Further, they receive long-term incentive (LTI) award payouts that are more than 50 percent above targeted goals.

Many Companies Won�t Disclose Performance Goals in Proxies

Efforts by the Securities and Exchange Commission (SEC) to encourage more disclosure of executive compensation are not making inroads with employers on one significant issue. A Watson Wyatt poll of 135 large U.S. companies shows most are reluctant to disclose performance goals for executive pay programs in their 2008 proxy statement.

Directors, Institutional Shareholders at Odds Over State of Executive Pay Model

Corporate directors and institutional investors disagree over whether the U.S. executive pay model is changing for the better and whether it has helped corporate performance.

Many Factors Influence 401(k) Investing

While the average U.S. household invests about 55 percent of its 401(k) or other defined contribution plan assets in common stocks, many Americans are investing all or nothing in equities. A host of factors, including education level and marital status, is contributing to these decisions, a new analysis of government data by Watson Wyatt has found.

Pension Fund Assets Grew Worldwide in 2007 but Face a Challenging 2008

Institutional pension fund assets in the 11 countries with the largest workplace retirement systems grew by about 9 percent during 2007 to more than $25 trillion. However, challenging market conditions in 2008 suggest many funds are now seeing values decline.

Two More Hours of Sales Activity Per Week Can Mean Millions

For sales professionals, shifting two hours of administrative tasks per week to time with customers can be worth as much as $225 million in additional expected revenue for a company with 1,800 new-business developers, a recent Watson Wyatt study has found.

Governance Key Factor for Strong Returns

Good governance practices make a big difference in the market value that institutional investors are able to capture, a new study finds.

Fund-of-Funds: The Right Entry Into Private Equity?

Institutional investors looking for a foothold in the growing private equity market often opt to invest in a fund-of-funds arrangement. While such funds provide quick access and other benefits, investors should keep several factors in mind before making such investments, experts at Watson Wyatt Investment Consulting say. Over time, investors may find that they will grow out of such arrangements.

Preparing for the Next Hot Market

Pension funds that have not examined their investment strategies may have been caught unaware by the recent turbulent market. For these funds, it may be time to lay the groundwork to benefit from the next advantageous market, experts at Watson Wyatt Investment Consulting say.

Financial Incentives Increasingly Part of Health Programs

More companies are planning to offer workers financial incentives for adopting healthy lifestyles in the next two years, a new study finds. Those companies that are best at controlling costs and increasing productivity are integrating a broad array of health management programs.

Rate Decreases Likely in Property/Casualty Insurance

The market for property and casualty insurance will stay soft in 2008, as premiums are expected to either decline or remain flat, according to actuarial and risk management experts at Watson Wyatt.

Effective Communicators Achieve Greater Returns

Companies with the most effective employee communication programs provided a 91 percent total return to shareholders from 2002 to 2006, a recent Watson Wyatt study has found. The return was only 62 percent for firms that communicated least effectively. Moreover, a significant improvement in communication effectiveness is associated with a 15.7 percent increase in market value.

Companies Worldwide Struggle to Attract, Retain Workers

Most companies in the United States and around the world are struggling to attract and retain top-performing and critical-skill workers, according to a new study by Watson Wyatt.

Companies Weigh Options for Retiree Medical Benefits

Now that market and regulatory changes are firmly in place, employers are looking at new ways to provide retiree medical benefits. Many are offering account-based programs and Medicare-approved health plans run by third parties.

Pension Plan Freezes Slow

The rate of pension plan freezes among FORTUNE 1000 firms has slowed, and a majority of companies that have defined benefit plans are committed to keeping them, two new studies by Watson Wyatt have found.

Workers Willing to Improve Health to Control Costs

Rising health care costs are causing considerable angst among U.S. workers. However, most workers say they are willing to improve their own health to help control future costs and prepare themselves for a more enjoyable retirement.

Multinationals Seek More Consistency in Global Investments

Many multinational companies are reexamining global investment choices and risk management strategies related to their retirement plans.

Companies Aim to Transform HR Delivery Strategy

As companies are changing benefit and compensation plans, they also are transforming the way they administer and communicate these programs, Watson Wyatt�s 2007 HR Technology Trends survey has found.

Second Phase of FASB Rules Could Introduce Entirely New Accounting Concepts

With many significant issues still unresolved, Phase Two of the Financial Accounting Standards Board�s (FASB�s) broad review of accounting rules for postretirement benefits could have considerable ramifications for plan sponsors.

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