Global - More HR professionals have realised the astuteness of putting in place measures which can help the company recoup executive compensation in case of poor performance.

In a March update to the survey last conducted in December by Watson Wyatt, the number of companies that have installed "clawback" policies and wage freeze to their executive compensation packages have dramatically increased. In the last three months, close to a quarter of respondents have added clawback policies, compared to 13% last year. Another 13% are considering adding one now, up from 1% previously.

Ira Kay, global director of executive compensation consulting at Watson Wyatt, believes the increasingly strict regulations on excessive risk are putting pressure on companies to act. "For that reason, it is essential for HR and compensation executives to determine ways to assess risk early and incorporate these into their executive pay programmes."

The survey also revealed that 55% of HR respondents polled have frozen their senior leaders' salaries in response to the worsening recession. This is a huge jump from the 21% in the earlier survey. Senior management will also see their annual bonuses and long-term incentive (LTI) pay amounts reduced by HR this year. Around half of respondents plan to cut this year's bonus pool by an average of about 40% while 9% of respondents have slashed bonus target opportunities, up from 4% in December.

One reason four in 10 of the companies that have already reduced or plan to reduce LTI grants said they did so because it was the "right thing to do in response to shareholder value". The survey added that a third of respondents expect their LTI grant dollar values to fall around 35%.

Other reasons cited for turning to such aggressive measures this year include declining competitive pressures from the market (34%) and poor company performance (23%).