Eye on the Future of Executive Compensation Programs

By minimizing discretion, directors give consistent direction to management. They avoid what might be perceived as forgiving poor results and forestall potential criticism from proxy advisory firms. 

While the Covid-19 crisis has caused a significant increase in board workload, the increased responsibilities relating to environmental, social and governance (ESG) matters will continue.

In setting or adjusting executive compensation for 2020, boards employed a variety of reactions and solutions. All of these were well intended, and some look to hold up well over time. Other compensation arrangements, by contrast, will look incongruous given what we know now.

The coronavirus pandemic has profoundly shaken the retail sector. Rapid changes in consumer behavior, supply chain disturbances, and government-mandated store closures contributed to a difficult 2020.

Setting goals for incentive compensation has long been one of the compensation committee’s biggest responsibilities, made especially difficult by the Covid-19 pandemic.

From March 1, 2020 to February 13, 2021, 270 Russell 3000 companies announced structural changes to their in-flight and/ or go-forward incentive plans

As a resource, we outlined some of the disclosure requirements, as well as formulas for incremental expense values for four major types of performance share modifications.

A new wave of innovation, centered on artificial intelligence, big data analytics, and the internet of things, is now intensifying the pace and magnitude of disruption.