September 14, 2010
Independence of Compensation Consultant
Item (B) the amount of fees received from the issuer by the person that employs the compensation consultant as a percent of total fees.
Comment: This needs two tests - percent of fees received (as written above) and a dollar amount (i.e., $200,000). The reason is that small compensation consulting practices often provide a large amount of service to a few clients. On a percentage test alone, the percent would be very high (maybe 33% of total revenue).
Likewise, for a large consulting practice where the percentage of total fees is low, there could a continuing conflict if the consultant provides a large amount of service to one or two clients, but is also told by his employer that his job is contingent on him retaining the client.