As the executive pay debate heats up following the TARP-related compensation limits, CFOs at public companies can expect to hear more on the issue from their own corporate directors.

What steps will directors take? Three or four primary actions, according to an insightful report from PricewaterhouseCoopers that appeared in my mailbox a couple of weeks ago.

The report contains board-level insights and guidance on about a dozen topics, including the impact of the economic crisis, governance and risk management, taxes (one of the meatiest sections), financial reporting developments, sustainability, IFRS, and more.

On the issue of executive pay, here’s the report’s guidance to directors:

Understand if compensation programs are being modified, and if so, how. Pay close attention to perception (how employees and shareholders might react to compensation decisions).

Consider the best way to disclose changes in compensation philosophy and approaches in the CD&A. Shareholders and regulators will closely monitor these components of annual reports.

Discuss with management any shareholder pressure to adopt “say on pay.”

I’ll come back to this report soon, as it offers other useful guidance, particularly related to the renewed focus on Foreign Corrupt Practices Act compliance. ###