SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

  [X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

          FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1996

  [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
          EXCHANGE ACT OF 1934


                         COMMISSION FILE NUMBER: 0-20724

                             WATSON WYATT & COMPANY
             (Exact name of registrant as specified in its charter)

         Delaware                                            53-0181291
      (State or other                                   (I.R.S. Employer
      jurisdiction of                                  Identification No.)
     incorporation or
       organization)


                            6707 Democracy Boulevard
                                    Suite 800
                          Bethesda, Maryland 20817-1129
          (Address of principal executive offices, including zip code)

                         TELEPHONE NUMBER (301) 581-4600
              (Registrant's telephone number, including area code)

--------------------------------------------------------------------------------

      Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days:

           Yes   [X]                                   No  [ ]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of February 10, 1997.

Common Stock, $1.00 par value                                 16,095,869
-----------------------------                                 ----------
           Class                                            Number of Shares


<PAGE>

PART I.      FINANCIAL INFORMATION
ITEM 1.      FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                             WATSON WYATT & COMPANY
                      Consolidated Statements of Operations
              (Thousands of U.S. Dollars, Except Per Share Amounts)

                                                                 Quarters Ended December 31,      Six Months Ended December 31,
                                                                 --------------------------        -------------------------
                                                                     1996           1995               1996           1995
                                                                 -----------    -----------         ----------     ----------
                                                                        (Unaudited)                       (Unaudited)
<S>                                                                    <C>           <C>                 <C>           <C>
Fees                                                             $   125,014   $   119,829        $   252,511   $   235,791

Costs of providing services:
     Salaries and employee benefits                                   56,966        58,697            119,630       120,845
     Occupancy and communications                                     21,466        16,934             40,463        32,213
     Professional and subcontracted services                          22,773        20,879             43,166        33,522
     Other                                                             6,381         7,933             12,044        11,954
                                                                   ----------    ----------        -----------    ----------
                                                                     107,586       104,443            215,303       198,534

General and administrative expenses                                   10,621         8,441             20,533        18,980
Depreciation and amortization                                          5,865         6,553             11,226        11,578
                                                                   ----------    ----------        -----------    ----------
                                                                     124,072       119,437            247,062       229,092

Income from operations                                                   942           392              5,449         6,699


Other:
     Interest income                                                     174           314                457           765
     Interest expense                                                   (492)         (371)              (767)         (490)

Loss from affiliates                                                  (1,812)         (203)            (3,117)         (283)
                                                                   ----------    ----------         ----------    ----------

Income (loss) before income taxes and minority interest               (1,188)          132              2,022         6,691

Provision for (benefit from) income taxes                               (412)        1,441              1,092         4,577
                                                                   ----------    ----------         ----------    ----------

Income (loss) before minority interest                                  (776)       (1,309)               930         2,114

Minority interest in net income of consolidated subsidiaries             (43)          (88)               (84)         (125)
                                                                   ----------    ----------        -----------    ----------

Net income (loss)                                                $      (819)  $    (1,397)       $       846    $    1,989
                                                                   ==========    ==========        ==========    ==========


Earnings (loss) per share                                        $     (0.05)  $     (0.08)       $     0.05     $     0.11
                                                                   ==========    ==========        ==========    ==========

</TABLE>


                             See accompanying notes
                                       -2-
<PAGE>


<TABLE>
<CAPTION>
                             WATSON WYATT & COMPANY
                           Consolidated Balance Sheets
                           (Thousands of U.S. Dollars)

                                                                                December 31,       June 30,
                                                                                    1996             1996
                                                                                 -----------      ----------
                               ASSETS                                                    (unaudited)
<S>                                                                                   <C>              <C>
Cash and cash equivalents                                                      $     8,558      $    21,694
Receivables from clients:
     Billed, net of allowances                                                      73,769           71,431
     Unbilled                                                                       57,565           53,122
                                                                                 ----------       ----------
                                                                                   131,334          124,553

Other current assets                                                                 9,659            6,936
                                                                                 ----------       ----------
     Total current assets                                                          149,551          153,183

Investment in affiliates                                                            44,578           41,195
Fixed assets                                                                        36,711           36,466
Deferred income taxes                                                               41,983           41,983
Deferred software and development costs                                             36,968           35,746
Other intangible assets                                                              3,450            3,820
Other assets                                                                         9,709            8,426
                                                                                 ----------       ----------

                                                                               $   322,950      $   320,819
                                                                                 ==========       ==========

    LIABILITIES, REDEEMABLE COMMON STOCK, AND PERMANENT SHAREHOLDERS' EQUITY

Accounts payable and accrued liabilities                                       $    80,237      $    88,203
Note payable                                                                        13,100             -
Income taxes payable                                                                   517           11,362
Deferred income taxes                                                               34,830           34,830
                                                                                 ----------       ----------
     Total current liabilities                                                     128,684          134,395

Accrued retirement benefits                                                         85,570           81,141
Deferred rent and accrued lease losses                                              17,962            9,904
Other noncurrent liabilities                                                        12,705           10,635

Minority interest in subsidiaries                                                      449              362

Redeemable Common Stock - $1 par value:
     25,000,000 shares authorized;
     16,780,318 and 18,261,963 issued
     and outstanding; at redemption value                                           82,895           90,214

Permanent shareholders' equity:
Adjustment for redemption value greater than amounts paid in by shareholders       (34,413)         (37,549)
Retained earnings                                                                   27,855           30,677
Cumulative translation gain                                                          1,243            1,040

Commitments and contingencies
                                                                                 ----------       ----------

                                                                               $   322,950      $   320,819
                                                                                 ==========       ==========

</TABLE>

                             See accompanying notes
                                      -3-
<PAGE>

<TABLE>
<CAPTION>

                             WATSON WYATT & COMPANY
                      Consolidated Statements of Cash Flows
                           (Thousands of U.S. Dollars)


                                                                               Six Months Ended December 31,
                                                                               -----------------------------
                                                                                   1996              1995
                                                                               ------------      -----------
                                                                                        (Unaudited)
<S>                                                                                   <C>              <C>    
Cash flows from operating activities:
     Net income                                                                $       846      $     1,989
     Adjustments to reconcile net income to net cash
     provided by operating activities:
         Provision for doubtful receivables from clients                             5,712            2,473
         Depreciation                                                                6,563            7,025
         Amortization of deferred software and development costs
             and other intangible assets                                             4,663            4,553
         Change in deferred income taxes                                              -               3,392
         Loss from affiliates                                                        3,117              283
         Minority interest in net income of consolidated subsidiaries                   84              125
         (Increase) decrease in assets:
             Receivables from clients                                              (12,493)           4,181
             Income taxes receivable                                                  -              (2,294)
             Other current assets                                                   (2,723)            (254)
             Other assets                                                           (1,283)          (1,889)
         Increase (decrease) in liabilities:
             Accounts payable and accrued liabilities                               (7,966)          (2,007)
             Income taxes payable                                                  (10,845)             302
             Accrued retirement benefits                                             4,429            8,530
             Deferred rent                                                           8,058              (99)
             Other noncurrent liabilities                                            2,070            1,677
         Other                                                                          97             (417)
                                                                                 ----------       ----------
         Net cash provided by operating activities                                     329           27,570
                                                                                 ----------       ----------

Cash flows from investing activities:
     Purchases of fixed assets                                                      (6,858)         (11,373)
     Proceeds from sales of fixed assets                                                76               23
     Acquisitions                                                                     (197)          (1,945)
     Investment in software and development costs                                   (5,272)         (16,796)
     Investment in affiliates                                                       (6,500)          (1,309)
                                                                                 ----------       ----------
         Net cash used in investing activities                                     (18,751)         (31,400)
                                                                                 ----------       ----------

Cash flows from financing activities:
     Net borrowings                                                                 13,100            4,500
     Issuances of Redeemable Common Stock                                              260            1,606
     Repurchases of Redeemable Common Stock                                         (8,111)          (5,640)
                                                                                 ----------       ----------
         Net cash provided by financing activities                                   5,249              466
                                                                                 ----------       ----------

Effect of exchange rate changes on cash                                                 37             (178)
                                                                                 ----------       ----------

Decrease in cash and cash equivalents                                              (13,136)          (3,542)

Cash and cash equivalents at beginning of period                                    21,694           11,860
                                                                                 ----------       ----------

Cash and cash equivalents at end of period                                     $     8,558      $     8,318
                                                                                 ==========       ==========
</TABLE>


                             See accompanying notes
                                       -4-

<PAGE>

<TABLE>
<CAPTION>

                             WATSON WYATT & COMPANY
      Consolidated Statements of Changes in Permanent Shareholders' Equity
                           (Thousands of U.S. Dollars)

                                                                                             Adjustment For Redemption
                                                                               Cumulative     Value Greater Than Amounts
                                                              Retained         Translation          Paid In By
                                                              Earnings            Gain             Shareholders
                                                            ----------         ----------           ----------

<S>                                                              <C>                <C>                   <C>         
Balance at June 30, 1996                                  $    30,677        $     1,040           $   (37,549)

Net income                                                        846

Effect of repurchases of 1,539,319 shares of
     common stock (various prices per share)                   (3,668)                                   3,668

Foreign currency translation adjustment                                              203

Adjustment of redemption value for change
      in formula book value per share                                                                     (532)
                                                            ----------         ----------            ----------

Balance at December 31, 1996 (unaudited)                  $    27,855        $     1,243           $   (34,413)
                                                            ==========         ==========            ==========

</TABLE>




                             See accompanying notes
                                       -5-
<PAGE>




                             WATSON WYATT & COMPANY

                   Notes To Consolidated Financial Statements
                                   (Unaudited)

1.   The  accompanying  unaudited  consolidated  financial  statements of Watson
     Wyatt & Company and its subsidiaries, (collectively, "Watson Wyatt" or "the
     Company"),  are presented in accordance  with the rules and  regulations of
     the  Securities  and  Exchange  Commission  and do not  include  all of the
     disclosures normally required by generally accepted accounting  principles.
     In the opinion of management,  these  statements  reflect all  adjustments,
     consisting only of normal recurring adjustments,  which are necessary for a
     fair presentation of the consolidated  financial statements for the interim
     periods.   The  consolidated   financial   statements  should  be  read  in
     conjunction with the audited  consolidated  financial  statements and notes
     thereto contained in the Company's Form 10-K for the fiscal year ended June
     30, 1996.

     The results of  operations  for the six months ended  December 31, 1996 are
     not  necessarily  indicative  of the results  that can be expected  for the
     entire  fiscal year ending June 30, 1997.  Certain  prior year amounts have
     been reclassified to conform to the current year presentation.

2.   On March 31,  1996,  the  Company  and State  Street  Bank & Trust  Company
     ("State  Street"),  formed  Wellspring  Resources,  LLC  ("Wellspring"),  a
     limited  liability  company  established  to  provide  benefits  and  human
     resources administration  outsourcing services. The Company contributed its
     existing  employee  outsourced  benefits  operations and deferred  software
     development  costs with a book  value of $15.4  million  to  Wellspring  in
     exchange for a 50%  interest,  and State Street  contributed  cash of $15.4
     million for the remaining 50% interest.  The Company and State Street share
     equally in the future funding requirements of Wellspring.

     In  connection  with the  formation of  Wellspring,  Watson Wyatt  retained
     certain client contracts for administrative and recordkeeping  services and
     entered  into an  agreement  whereby  Wellspring  will provide the services
     required  by the  contracts  on behalf  of the  Company  at cost.  Expenses
     charged  to the  Company by  Wellspring  for such  services  during the six
     months ended  December 31, 1996 were $18.4  million.  The client  contracts
     provide for the receipt of fees  during an  implementation  period in which
     the Company develops custom software platforms and systems and performs the
     related   activities   necessary   to  commence  the   administrative   and
     recordkeeping  services.  The  Company  defers  all fees  received  and all
     directly  related  software  and  systems   development  costs  during  the
     implementation  period,  and recognizes  such fees and costs in income over
     the remaining  lives of the contracts upon  commencement  of services under
     such contracts.  Deferred  software and development  costs related to these
     contracts  totaled $28.3 million and $25.3 million and the related deferred
     contract  revenues  totaled  $6.9  million and $7.3 million at December 31,
     1996 and June 30, 1996, respectively.


3.   Under the  Company's  stock  purchase  plan,  the Company is  obligated  to
     repurchase its Redeemable  Common Stock,  except in certain  circumstances.
     Accordingly,  the redemption  value of outstanding  shares is classified as
     Redeemable  Common  Stock  and  not  as  permanent   shareholders'  equity.
     Redeemable  Common  Stock is  equal to the  number  of  shares  outstanding
     multiplied  by the Formula Book Value per share,  which was $4.94 per share
     at December  31, 1996 and June 30,  1996.  Permanent  shareholders'  equity
     includes an adjustment for the difference  between the redemption  value of
     the Redeemable  Common Stock and the amounts  actually paid by shareholders
     for the shares.
                                      -6-
<PAGE>


4.   During the six months  ended  December 31,  1996,  the Company  repurchased
     1,539,319  shares of  common  stock,  at  various  prices  per  share.  The
     computation of earnings per share is based upon the weighted average number
     of shares of common  stock  outstanding  during the  period.  The number of
     shares used in the  computation  is 17,000,000 and 18,466,000 for the three
     months ended December 31, 1996 and 1995,  respectively,  and 17,341,000 and
     18,676,000   for  the  six  months  ended   December  31,  1996  and  1995,
     respectively.

5.   During  fiscal  year  1997,  the  Company   recorded   sublease  and  lease
     termination losses of $12.1 million,  of which $10.3 million related to the
     relocation of the corporate office space.  The corporate office  relocation
     to a less  expensive  suburban  location  will  result  in a  reduction  of
     occupancy expense in future years.

6.   The Company guarantees certain leases for office premises and equipment for
     its affiliate,  Wellspring.  Minimum rentals  guaranteed under these leases
     are $2.8 million in fiscal year 1997 and  aggregate  $73.3  million for the
     remaining  lease terms,  which expire at various dates through 2007.  These
     leases are also jointly and severally guaranteed by State Street.

                                      -7-

<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
     OF OPERATIONS

GENERAL

Watson  Wyatt  &  Company,   together  with  its  affiliates  and   consolidated
subsidiaries,  (collectively,  "Watson Wyatt" or "the Company"),  provides human
resource  and  employee  benefits  consulting  and  administrative/recordkeeping
services. The Company also provides a broad range of services in risk management
and general insurance and investment consulting,  and derives fees from sales of
surveys.  The Company works with  organizations  of all sizes,  from the largest
multinationals to public employers and nonprofit institutions.

Watson Wyatt's fiscal year ends June 30. The financial  statements  contained in
this quarterly report reflect  consolidated  balance sheets as of the end of the
second  quarter of fiscal year 1997 (December 31, 1996) and as of the end of the
prior  fiscal  year  1996  (June  30,  1996),  and  consolidated  statements  of
operations,  of cash flows and of changes in permanent  shareholders' equity for
the three and six months ended December 31, 1996 and 1995.

RESULTS OF OPERATIONS - THREE AND SIX MONTHS ENDED DECEMBER 31, 1996 COMPARED TO
THREE AND SIX MONTHS ENDED DECEMBER 31, 1995.

For the first six months of fiscal year 1997 the Company  produced net income of
$.8 million,  a decrease of $1.2 million from net income of $2.0 million for the
first  six  months of fiscal  year  1996.  Fiscal  year 1997  results  include a
sublease loss of $10.3 million  associated  with the relocation of the corporate
offices in  Washington,  D.C. to a less  expensive  suburban  facility  and $1.8
million in other lease losses.

Fees for the first six months of fiscal year 1997 total $252.5 million  compared
to $235.8  million for the first six months of fiscal year 1996,  an increase of
$16.7 million,  or 7%.  Revenue  growth has occurred  across almost all lines of
consulting  business on relatively stable headcount and consistent  utilization.
Principal areas of significant revenue growth include the Asia Pacific and Latin
America consulting regions and the outsourcing clients retained by the Company.

Salaries and  employee  benefit  expenses for the second  quarter of fiscal year
1997 were $57.0  million,  a decrease of $1.7 million or 3%, from $58.7  million
the second  quarter of fiscal  year 1996.  The  Company  incurred  salaries  and
employee  benefit  expenses of $119.6  million in the first six months of fiscal
year 1997,  a decrease of $1.2  million,  or 1%,  from $120.8  million the prior
fiscal year. Amendments to the Company's postretirement benefit plan resulted in
a decrease  in expense of $4.9  million,  which was  partially  offset by normal
annual salary increases of approximately  $3.6 million.  In conjunction with the
changes to the  postretirement  benefit plan,  the Company  established a 401(k)
match of up to 3% of salaries beginning January 1, 1997. This future increase in
expense will be offset by the reduction in postretirement benefit costs.

Occupancy and  communication  expenses  during the second quarter of fiscal year
1997 totaled $21.5 million, an increase of $4.6 million, or 27%, from the second
quarter  of the  prior  year.  For the first six  months  of fiscal  year  1997,
occupancy and communication  expenses totaled $40.5 million, an increase of $8.3
million,  or 26%,  from the first six months of the prior year.  The increase is
due to the $12.1 million in sublease and lease termination losses primarily from
the  relocation of the corporate  office  recorded in fiscal year 1997 partially
offset  by $3.5  million  in  lower  expenses  as a  result  of the  sale of the
Minneapolis outsourcing center and the formation of Wellspring in March 1996.

                                      -8-
<PAGE>


Professional  and  subcontracted  services  relating to consulting  offices were
$22.8 million during the second quarter of fiscal year 1997, an increase of $1.9
million  over the second  quarter of the prior  fiscal  year.  For the first six
months of fiscal year 1997,  professional and subcontracted  services were $43.2
million,  an increase of $9.7 million,  or 29%, over $33.5 million for the first
six months of fiscal year 1996.  The increase is primarily  due to costs charged
by Wellspring for servicing the retained outsourcing clients.

Other costs of providing services, which include travel and hotel, publications,
and general office expenses,  were $6.4 million for the second quarter of fiscal
year 1997, a decrease of $1.5 million, or 20%, from the second quarter of fiscal
year  1996.  For the  first  six  months of fiscal  year  1997,  other  costs of
providing services increased by $.1 million,  or 1%, to $12.1 million from $12.0
million the prior year.

General and  administrative  ("G&A")  expenses for the second  quarter of fiscal
year 1997 were $10.6 million,  a $2.2 million,  or 26%, increase from the second
quarter of fiscal year 1996.  For the first six months of fiscal year 1997,  G&A
expenses  were $20.5  million,  a $1.5 million  increase  from $19.0 million the
prior fiscal  year.  The  increase in expense is  primarily  attributable  to an
increase in  advertising  and  promotional  expenses to further  strengthen  the
Company's market position.

Depreciation and amortization  expense of $5.9 million for the second quarter of
fiscal year 1997 represents a decrease of $.7 million over the second quarter of
fiscal  year 1996.  For the first six months of fiscal  year 1997,  depreciation
decreased $.4 million, or 3%, over the prior year expense of $11.6 million.  The
decrease is  attributable  to the disposal of assets in the prior year and lower
levels of capital expenditures.

Income before  income taxes and minority  interest of $2.0 million for the first
six months of fiscal year 1997 resulted in a tax provision of $1.1 million. This
compares to a provision of $4.6 million on $6.7 million of income  before income
taxes and minority  interest  for the first six months of fiscal year 1996.  The
effective tax rates for the six months ended  December 31, 1996 and December 31,
1995 were 54% and 68%,  respectively.  The higher effective tax rate for the six
months  ended  December  31,  1995  is due to the  nondeductibility  of  certain
expenses recorded during that period.

LIQUIDITY AND CAPITAL RESOURCES.

The Company relies primarily on funds from operations and short-term  borrowings
as its source of  liquidity.  The Company  believes  that it has access to ample
financial resources to finance its growth as well as support ongoing operations.
The  Company's  cash and cash  equivalents  at December  31, 1996  totaled  $8.6
million,  compared to $21.7 million at June 30, 1996. The Company had borrowings
outstanding  under its line of credit of $13.1  million at December 31, 1996 and
no borrowings at June 30, 1996.

CASH FROM OPERATIONS.  For the first six months of fiscal year 1997, the Company
had cash inflows from  operations of $.3 million,  compared to $27.6 million for
the first six months of fiscal year 1996.  The  decrease in cash inflows in 1997
are due to an increase in bonus and income tax payments, an increase in advances
to Wellspring operations and a reduction in client collections.

The Company's ratio of current assets to current liabilities was 1.2 at December
31, 1996 and 1.1 at June 30, 1996.

CASH FROM  INVESTING  ACTIVITIES.  Investing  activity  cash  outflow  was $18.8
million for the six months of fiscal year 1997,  versus  $31.4  million in 1996.
The  decrease  in  investing  cash  outflows  is due to lower  levels of capital
expenditures,  lower spending on deferred  software and client software  systems
costs,

                                      -9-
<PAGE>

including  amounts which were contributed to Wellspring,  and the acquisition of
HRE, Inc. in fiscal year 1996.

Anticipated  commitments  of funds for the  remainder  of  fiscal  year 1997 are
estimated at $20 million, which includes expected purchases of fixed assets, 50%
of the future  capital  requirements  of  Wellspring,  and 50.1% of the  capital
requirements of WWHE.  Operating cash flows should, in combination with the line
of credit described below, provide for the Company's ongoing cash needs.

The Company  has an $80 million  revolving  credit  line which is  scheduled  to
mature on January  5, 2001.  Fifty-five  million  dollars of the credit  line is
available to the Company as revolving  credit for  operating  needs,  subject to
certain borrowing limitations.  The remaining $25 million is available to secure
loans to associates from financial  institutions  for the purchase of Redeemable
Common Stock made  available  under the Company's  stock  purchase  program.  At
December 31, 1996, $37 million of the credit line is available to the Company as
revolving credit for operating needs.

CASH FROM FINANCING  ACTIVITIES.  Cash flow provided by financing activities was
$5.2 million for the first six months of fiscal year 1997, versus $.5 million in
the preceding  year.  The increase is due  primarily to the  increased  level of
borrowing in fiscal year 1997.

                                      -10-

<PAGE>


PART II.   OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

Watson Wyatt is from time to time a defendant in various lawsuits which arise in
the  ordinary  course of  business.  These  disputes  typically  involve  claims
relating to employment  matters or the rendering of professional  services.  The
management  of the Company does not believe that any such  currently  pending or
threatened  litigation  is  likely  to have a  material  adverse  effect  on the
business or financial condition of Watson Wyatt.


ITEM 2.   CHANGES IN SECURITIES

None


ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

None.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

A.         Board Election

At the fiftieth annual meeting of shareholders of the Company,  held on November
6, 1996, the  shareholders  elected fifteen (15) nominees to the Board.  Proxies
representing 15,745,960 shares were received (total shares outstanding as of the
Record Date were 17,140,508) and the results of the voting were as follows:

NOMINEES TO THE BOARD                  FOR                      WITHHOLD

Walter W. Bardenwerper               14,059,882                 1,686,078
Charles A. Clemens                   14,735,687                 1,010,273
Paul R. Daoust                       14,859,366                   886,594
John J. Gabarro                      14,688,491                 1,057,469
John J. Haley                        14,900,320                   845,640
Gary T. Hallenbeck                   14,583,634                 1,162,326
Daniel B. Holmes                     14,616,360                 1,129,600
Ira T. Kay                           14,905,760                   840,200
Brian E. Kennedy                     15,128,985                   616,975
Robert D. Masding                    15,184,547                   561,413
R. Michael McCullough                15,191,732                   554,228
A. W. Smith, Jr.                     14,198,275                 1,547,685
John A. Steinbrunner                 14,988,369                   757,591
A. Grahame Stott                     15,214,021                   531,939
Angela H. Watson                     14,090,227                 1,655,733

                                      -11-

<PAGE>




B.         Amendment to Bylaw Section  9

The  shareholders  also voted to approve an amendment to the  Company's  Bylaws.
This amendment authorized modifying the formula for determining the price of the
Company's Common Stock to eliminate temporary  variations in stock value arising
from certain non-operating transactions.  Specifically, the amendment (i) spread
the economic  impact of certain real estate  sublease  losses over the remaining
life the sublease (ii)  eliminated  annual  changes in the Currency  Translation
Adjustment  ("CTA")  occurring  after  June 30,  1996 and (iii)  eliminated  the
adjustment  related to the value of the  Company's  survey  business  for future
years. The modified formula,  which is called "Formula Book Value," will be used
to determine share price for periods subsequent to June 30, 1996.

The  amendment  was  approved  by the  affirmative  vote of more than 80% of the
Company's  outstanding  stock  (as  required  per  Section 9 of the  Bylaws)  as
follows:

      For:            14,894,976
      Against:           850,984




ITEM 5.    OTHER INFORMATION

None.



ITEM 6.    EXHIBITS AND REPORTS ON FORMS 8-K

a.    Exhibits

3.1  Restated  Certificate  of  Incorporation  of Watson  Wyatt & Company(1)  
3.2  Restated Bylaws, dated November 22, 1996(4) 
4.1  Form of Certificate Representing Common Stock(2) 
10.1 Third Amended and Restated  Credit and Security  Agreement, dated
     January 5, 1996(3)
10.2 First  Amendment  to The Third  Amended and  Restated  Credit and  Security
     Agreement, dated June 14, 1996(1)


b.   Reports on Form 8-K

     None



------------------

(1)  Incorporated by reference from the Registrant's  Annual Report on Form 10-K
     for the year ended June 30, 1996 (File No. 0-20724), filed on September 27,
     1996.

(2)  Incorporated by reference from Registrant's Initial Registration  Statement
     on Form 10 (File No. 0-20724), filed on October 13, 1992.

(3)  Incorporated by reference from  Registrant's  Quarterly Report on Form 10-Q
     for the quarter ended March 31, 1996 (File No.  0-20724),  filed on May 13,
     1996.

(4)  Filed herewith

                                      -12-

<PAGE>





Signatures


Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

Dated:  February 10, 1997

Watson Wyatt & Company
(Registrant)




/S/ A. W. Smith, Jr.                         /S/ Barbara L. Landes
--------------------------------             -------------------------------
Name:    A. W. Smith, Jr.                    Name:     Barbara L. Landes
Title:   President and Chief                 Title:    Vice President and Chief
         Executive Officer                             Financial Officer



                                      -13-

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