CAQ Signs Aspen Principles

The Center for Audit Quality, a affiliated group of the American Institute of CPAs, has signed on to the Aspen Principles, a set of guidelines focused on business practices, investment practices and the long-term competitiveness of U.S. business. Prompted by concerns about the short-term pressures on publicly traded companies and rising public sentiment against excessive executive compensation, the signing of the four-page document by 12 members of The Aspen Institute Corporate Values Strategy Group is the culmination of a two-year process. The Aspen Institute Business and Society Program spearheaded the lengthy initiative in collaboration with the Council of Institutional Investors and the Business Roundtable. Key provisions of the Aspen Principles call for: * Companies to stop providing quarterly earnings guidance to analysts and to not respond to analyst estimates. * Corporate boards to communicate with "long-term- oriented investors" on senior executive compensation. * Requiring senior executives to hold stock they are given for at least some period beyond their tenure with the company, thus tying them to the long-term growth of the company. * Banning senior executives from hedging the risk of long-term-oriented stock option compensation. * Providing for "clawbacks," which involve recouping senior executive compensation awarded based on the achievement of performance targets subsequently slashed or wiped out by corporate financial restatements. Other organizations that have signed the Aspen Principles include the AFL-CIO, PepsiCo, Pfizer and Xerox. Separately, the CAQ said that it would host a panel discussion and luncheon July 30 at the National Press Club in Washington to mark the fifth anniversary of the passage of Sarbanes-Oxley.