The U.S. securities industry lobby group says it supports the public company compensation guidelines issued by the U.S. Conference Board Monday.

The Securities Industry and Financial Markets Association announced that it endorses the Conference Board’s Task Force on Executive Compensation report, which provides compensation guiding principles to all public companies. SIFMA notes that the report has many similarities to the financial services guidelines that it unveiled in June.

The report states that public companies should: establish a clear link between pay, strategy and performance; provide compensation that is fair, affordable and clearly aligned with actual performance; eliminate controversial compensation practices such as excessive golden parachutes, and overly generous severance arrangements, unless they can be specifically justificated; demonstrate credible board oversight of executive compensation; and, foster transparency about compensation practices.

“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. Implementing the compensation principles we recommend is an important step in restoring the damaged trust in American companies,” said Robert Denham and Rajiv Gupta, co-chairs of task force. “At the same time, we believe compensation committees and boards must be free to develop compensation programs that reflect their shareholders’ interests and fit their companies’ business objectives.”

“Real – and perceived – abuses in executive compensation have contributed to this loss of trust, and the task force report provides a practical set of guidelines that, if appropriately implemented, can make significant progress in restoring credibility in our corporations,” they added. “We believe that a rules-based, ‘check the box’ approach cannot substitute for thoughtful board action discussed with shareholders.”

“The Conference Board has delivered an impressive and thoughtful report with well-considered and constructive principles. As a leading financial services trade association, we, too, set forth similar guidelines and urged our member firms towards implementation,” said Ken Bentsen, executive vice president for public policy and advocacy. “On this crucial issue, our guiding principle must be to better align pay, long-term performance and shareholder interests.”

IE