Charting the Industry: Executive Bonus Pay Problematic for PR

Despite many companies in North America anticipating a decline in shareholder value in 2011, a majority expect executive bonus pools to be as large or larger than those in 2010, says a December 2011 study by Towers Watson. This puts communicators who work for these companies—as well as communicators in the business community at large—under the gun: Not only must they justify to the public why executives are receiving higher bonuses, they must also explain the bonuses to shareholders as well. FALL FROM GRACE It’s a vexing problem for PR, given the lack of trust of the corporate world by the public. From about 2005 to 2007, corporate leadership—effectiveness, honesty, integrity and drive—tended to be the strongest driver of reputation in most industries, with a big impact on bottom-line performance, says Pam Cohen, behavioral economist at the PR agency Dix & Eaton. But that all changed starting in 2007 and into 2008.

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