October 23, 2017 Executive Compensation Executive & Director Pay Design Articles

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Executive & Director Pay Design

Executive Pay Decisions Ripple Throughout Companies

A mid-sized consumer products company introduced a relative total shareholder return (TSR) measure to its long-term incentive program.

The company had an “all-for-one, and one-for-all” culture, so all managers in the organization carried that same relative TSR metric. After a few years of challenged market performance, several mid-level managers left the company, seeing their unvested equity values fall and having a general sense that their individual contributions were too distant to affect relative TSR.

The lesson: Board decisions on executive pay can have big impacts on the broader employee population.

View the full article as it was originally published.

Barry Sullivan

Margaret Hylas

This article was originally published in Directors & Boards.

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