Coronavirus and Executive Compensation
Here, you will find regular updates on compensation issues related to Covid-19, including our latest thinking on the implications for executive compensation programs, an inventory of publicly disclosed actions companies have taken in response, and the results of our survey about how companies are managing compensation issues.
FEATURED REPORTS
REPORT
Incentive Design Changes in Response to Covid-19, Russell 3000
Incentive design changes in response to Covid-19. Updated 12/18/2020. We also partnered with The Conference Board and ESGUAGE analytics on a new database tracking incentive design changes across the Russell 3000 (as of 10/9/2020), where users can filter the data and view visualizations.
PAY ACTION REPORT
VOLUME 5: Impact of Covid-19 on Executive and Director Compensation
Inventory of publicly disclosed executive compensation actions in response to Covid-19. Updated 5/18/2020. We also partnered with The Conference Board and ESGUAGE analytics on a live database tracking these actions, where users can filter the data and view additional visualizations.
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SURVEY RESULTS
Covid-19 Pulse Results: Effectively Managing Executive Compensation in a Crisis
Covid-19 will have broad implications for compensation programs at most companies, but many are delaying key decisions until they have greater clarity. The report highlights current actions taken and those in consideration for late 2020 and 2021.
OUR INSIGHT on Covid-19
Executive Compensation under Covid: What to Look for in the 2021 Proxy Season
April 7, 2021 by Blair Jones
Advisors and investors must decide whether each company’s compensation actions, in their unique context including the experience of employees and other stakeholders, were fair and well-constructed to ensure sustained overall performance over time.
Key Compensation Issues In Retail for Q1 2020
February 24, 2020 by Blair Jones & Mark Emanuel
With the pandemic’s disruption continuing in 2021, we discuss three critical compensation issues that management teams and boards face in the first quarter of 2021.
Setting 2021’s Compensation Goals in the Wake of COVID
February 11, 2021 by Blair Jones & Greg Arnold
Boards are used to working with uncertainty in setting incentive goals, but 2021 is forcing them to raise their game.
Eye on the Future of Executive Compensation
November 20, 2020 by Blair Jones & Todd Sirras
Thinking longer-term is difficult when the world turns upside down. Executive pay is no exception. Our focus narrows to the items in front of us and getting past current obstacles. Eventually we focus on getting “back on track” when the existential risk passes or we get used to it, and the new “normal” gets shaped by these prior experiences.
The Time Is Right to Assess Pay Fundamentals
November 06, 2020 by Roger Brossy & Blair Jones
The coronavirus pandemic has upended the key tenets of executive compensation, especially the performance-based incentives that comprise the majority of executive pay. Debates over these tenets may be timeless, but the current crisis should and will prompt reflections on executive pay. In this NACD Directorship article, Roger Brossy and Blair Jones discuss the steps boards can take and questions directors can ask to guide that reflection.
Modification to In-Flight Performance Share Awards: Accounting and Disclosure Implications
October 13, 2020 by Blair Jones, Doug Tormey
Companies considering adjustments to in-flight performance share awards as a result of COVID-19 must consider accounting and disclosure implications of a modification to the awards.
Webinar: Incentive Design Changes in Response to Covid
October 6, 2020 by Blair Jones, Greg Arnold
Semler Brossy moves the incentive pay conversation forward in a recent webinar, sharing insights from relevant client work and a recent study of pandemic-driven incentive changes for Russell 1000 companies.
What to Do About Long-Term Incentives in the Pandemic
September 9, 2020 by Blair Jones, John Borneman and Andres Ibarra
Whatever boards decide, they will want to be clear and transparent on any substantial departures from usual practice.
What to Do About Annual Incentive Plans in the Pandemic
August 25, 2020 by Blair Jones, John Borneman and Andres Ibarra
Boards can still work to ensure they position their companies as well as possible to enter FY2021.
Principles for Paying Incentives in the Midst of Covid-19
July 17, 2020 by Greg Arnold & Blair Jones
As the crisis extends, Boards are challenged with how to forecast, and how to keep executives motivated.
At Your Discretion
July 10, 2020 by Greg Arnold & Mark Emanuel
When and how should directors adjust executive incentive payouts?
Human Capital Management: Pandemic Challenges and Opportunities
June 5, 2020 by Blair Jones, Avi Sheldon and Matt Westlund (download)
For boards, the pandemic is a major opportunity to work with management to build a competitive advantage through human capital investment.
Remembering TARP: The Executive Compensation Guidelines
May 2020 by Avi Sheldon (download)
As bailout money is approved, we recommend a look back at the impact of TARP on executive compensation. We put together this document as a reference guide.
Preparing for Pandemic-Related Discretionary Compensation Adjustments
April 30, 2020 by Mark Emanuel and Blair Jones
This article offers a framework for tracking the business impacts from Covid-19, and for laying a foundation for any pay adjustments.
The Long-Tailed Impact of the Covid-19 Pandemic on Compensation
April 23, 2020 by Austin Vanbastelaer and Todd Sirras
The employee/employer relationship, including compensation and benefits, will be radically different in the post-Covid-19 world.
Emergency Succession Planning in a Covid-19 World
April 7, 2020 By Greg Arnold and Todd Sirras
Covid-19 will create a separate set of issues, but the principles for dealing with sudden executive turnover are consistent.
Director Stock Awards during Covid-19
April 6, 2020 By John Borneman
One of the next significant pay actions will be making stock awards to board members.
Coronavirus and Compensation: What Should Companies Do Now?
March 26, 2020 By John Borneman, Blair Jones & Kathryn Neel
As the scale and severity of Covid-19 continues to expand, companies are wrestling with a host of business continuity and human resource challenges.
Four Ways to Appropriately Address the Impact of Covid-19 on Executive Compensation Programs
March 10, 2020 By Greg Arnold & Todd Sirras
As the scale and severity of Covid-19 continues to expand, companies are wrestling with a host of business continuity and human resource challenges.
From Dialogue
Coronavirus Crisis Dents Salaries, Not Stock Awards, for Many CEOs
June 3, 2020 By The Wall Street Journal (subscription required)
Hundreds of U.S. companies reduced salaries for their chief executives as the coronavirus pandemic swept across American business….
U.S. Firms Shield CEO Pay as Pandemic Hits Workers, Investors
May 28, 2020 By Reuters
Sonic Automotive Inc (SAH.N), which operates 95 U.S. car dealerships, started laying off and furloughing about a third of its workforce….
Executive Compensation May Set the Tone for a Company’s Response During Covid-19
May 22, 2020 By KPMG LLP (download)
The impact of COVID-19 is beyond what typical business continuity and resilience plans have contemplated. As a result, all parts….
Coronavirus Puts Top Executives’ Pay in the Spotlight
May 17, 2020 By Financial Times (subscription required)
Like most high street retailers, UK jewellers H Samuel and Ernest Jones have been hammered by the coronavirus. Amid slumping sales…
Covid-19 Impact on Executive Compensation — Amending Performance Goals under Equity and Other Incentive Awards
May 12, 2020 By Proskauer Rose LLP
Setting meaningful and effective performance goals often requires significant focus and analysis by compensation committees with…
As Rich 2019 Paydays Roll In, Media CEO Salaries Will Be Hard To Justify in a Covid-19 Economy
May 1, 2020 By Deadline.com
April proxy season, which just ended, is an annual rite that lifts the curtain on CEO salaries for the previous year ahead…
Covid-19: Impact on Nonqualified Deferred Compensation Plans
April 29, 2020 By Davis Polk & Wardwell LLP (download)
The coronavirus (Covid-19) pandemic and the ensuing market uncertainty, as well as recently enacted legislation, have upended…
Coronavirus Crimps Some CEO Salaries but Not All
April 24, 2020 By The Wall Street Journal (subscription required)
Cheesecake Factory Inc. furloughed about 41,000 hourly restaurant workers to conserve cash in the coronavirus pandemic…
The Covid-19 Test for Compensation Committees
April 24, 2020 By Morgan Lewis & Bockius LLP
Compensation committees of US-based public companies (Compensation Committees) will have important decisions to make in the coming…
Companies That Don’t Cut Executive Pay Now Could Pay for It Later
April 21, 2020 By The Wall Street Journal (subscription required)
Senior executives are taking pay cuts in an attempt to show solidarity with their employees who are being downsized in unprecedented…
Covid-19 Business Impact: Interpretive Issues Under the CARES Act Pay Limits
April 21, 2020 By Dechert LLP
The Coronavirus Aid Relief and Economic Security Act (the “CARES Act”)1 is the third stimulus package passed by Congress to combat the effects…
Covid-19 – Considerations for Public Company Director Compensation
April 21, 2020 By Cooley LLP
As businesses continue to navigate the health and economic challenges posed by the Covid-19 pandemic, annual shareholder meeting dates…
Addressing the Impact of Covid-19 in the 2020 Proxy Statement
April 20, 2020 By Weil, Gotshal & Manges LLP
As companies prepare to file their proxy statements for the 2020 annual meeting, the question arises as to where…
Employee Benefits Issues When Implementing Employee Salary Reductions Due to Coronavirus
April 15, 2020 By Foley & Lardner LLP
As the novel coronavirus pandemic continues to impact businesses across the country and the world, many employers have…
Covid-19 Compensation Q&As: Incentive Plans and Deferred Compensation
April 13, 2020 By Pepper Hamilton LLP
This article answers questions about incentive plan considerations and nonqualified deferred compensation issues arising…
The Covid-19 Corporate Response Tracker: How America’s Largest Employers Are Treating Stakeholders Amid the Coronavirus Crisis
March 31, 2020 By JUST Capital
The coronavirus pandemic and impending recession have created an urgent, unprecedented opportunity for CEOs and corporate leaders…
A Death at Jefferies Highlights Urgency of C-Suite Backup Plans
March 29, 2020 By Bloomberg (subscription required)
Like all aspects of society, the rules of the C-suite are being rewritten under the pressure of a deadly pandemic…
Coronavirus Caps Years of Rich Pay for Many CEOs
March 23, 2020 By The Wall Street Journal (subscription required)
Chief executives of large U.S. companies rode a more than decade-long bull market to a string of record pay days. Now, the stock…
Why CEOs Give Up Their Salary During a Crisis
March 18, 2020 By Adweek, LLC
While the C-suites of America’s top airlines are asking the U.S. government for what could amount to more than $50 billion…
Companies Adjust Executive Pay Amid Covid-19
March 17, 2020 By Equilar Inc.
The landscape of the world has been significantly impacted by the outbreak of the coronavirus (Covid-19) in a matter of weeks. On Friday…
The Impact of Covid-19 on Incentive Compensation
March 16, 2020 By Shearman & Sterling LLP
The Covid-19 outbreak has had a swift and volatile impact on business operations and the financial markets. Because this…
The Impact of Covid-19 on Performance-Based Compensation Programs
March 13, 2020 By Paul, Weiss, Rifkind, Wharton & Garrison LLP
As the coronavirus disease (Covid-19) pandemic continues and the economic consequences are becoming increasingly severe, this Client…
