With News Corp announcing this week a new compensation framework aimed at better-aligning executive incentives with shareholder interest, it once again brings into sharp focus the changing nature of executive compensation in the US—changes being pushed both internally at the board level and from policy-makers.

News Corp, owner of the Wall Street Journal and Dow Jones & Co, has filed with the SEC plans to offer performance-based bonuses in the coming year to executives—including CEO Rupert Murdock, head of European and Asian operations James Murdoch, COO Chase Carey, and CFO David DeVoe. 

The change is driven by a number of years of uninspiring results. News Corp’s share price has dropped more than 40 percent since 2007. 

Under the new incentive plan, CFO David DeVoe will receive a cash bonus of $5 million for 2011, with the possibility of double that on the back of strong company results. Plus, he has a stock-based compensation package valued up to $2.5 million.

Last year DeVoe received incentive plan bonuses of $2.2 million and stock awards of $2.7 million, according to research from Equilar.

News Corp is not alone in changing its compensation policies for executives. With increasing pressure from shareholders and growing enforcement from the SEC, executive incentive clawbacks are increasingly becoming a regular addition to corporate America’s compensation guidelines.

In fact, by 2009 over 70 percent of Fortune 100 companies had some sort of clawback policy in place, according to research by Equilar. 

Retailer Target recently added clawback provisions, for example, and games maker Electronic Arts (EA) has had such a policy in place since mid-2009.

EA’s clawback provision lets the firm’s Executive Compensation and Leadership Committee terminate and claw back any equity awards to an executive for the previous 12 months after the filing of erroneous financial statements that require restatement as a result of fraud or other misconduct that contributes to the restatement. 

In fact, it is becoming something of a trend, and one that the SEC and legislators are happy to promote. The SEC is doing its part by testing its clawback powers under Sarbox, winning a Supreme Court challenge recently-- Free Enterprise Fund v. Public Company Accounting Oversight Board-- which upheld Sarbox clawback provisions-albeit with a narrow ruling.

As we explained here the Dodd-Frank bill will extend clawback provisions beyond those covered under Sarbox. For example, by covering all current and former executive officers over three years of filing—not just CEOs and CFOs--and by providing for compensation clawback in instances of material non-compliance, whereas Sarbox required misconduct on the part of executives to effect clawbacks.

All in all, executive compensation programs look set to continue to evolve under new legislative and regulatory guidelines and under increasing pressure from shareholders to tie compensation more closely to shareholder interests.