By Cydney Posner

This article from Reuters argues that compensation committee members are now as much at risk of litigation and ouster as audit committee members, if not more so: "A seat on the audit committee was once considered the riskiest role for corporate directors, but the recent focus on executive pay has put an uncomfortable spotlight - along with some nasty lawsuits - on the group that oversees compensation."

Shareholder activists and others are seen as "piggybacking on Occupy Wall Street's mistrust of large companies, spearheading social media campaigns and lawsuits to take companies to task for pay discrepancies between corporate chiefs and their underlings." According to commentators quoted in the article, "[r]isk has shifted to the compensation committee," and litigation aimed at compensation has "soared." These commentators suggest that now compensation committee members face, among other risks, "[p]ersonal reputation risk, being sued, being challenged by regulators, being challenged by shareholders…." The shift is surprising to some directors. One director quoted in the article speculated about possible causes: "Maybe it's a factor of class warfare, maybe it's a factor of the tough economy. Everything now is seen through the lens of risk. It's turning everything upside down."

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