Resource Library Executive & Director Pay Design

A big issue facing businesses is whether inflation should lead to higher levels of compensation. The answer is: “it depends.”  

As Committees set compensation amounts and structure, five key questions can inform their decisions.

In 2020, amid the vast economic uncertainty from Covid-19, CEO total pay levels were mostly unchanged year-over-year, with lower cash compensation partially offset by equity grants. As we look ahead and consider how the pandemic will affect pay levels for 2021, we anticipate three trends.

The pandemic has made omnichannel and digital expansion an urgent priority for traditional retailers.

How does the board keep the magic alive as the company matures? How does the organization keep talent engaged when financial incentives become less effective? How do you keep competitors—whether established or upstarts—from coming for your now-proven talent?

The pandemic and other developments have changed the landscape for corporate behavior and strategy. Executive compensation must adapt accordingly for companies to capture fresh opportunities and overcome new challenges.

Stay competitive with your Director Pay decisions to attract the best talent and avoid criticism.

Semler Brossy Consulting Group has conducted a comprehensive, ten-year study on publicly traded real estate investment trust (REIT) pay programs. The study explores how pay trends have moved and changed over time, emerging practices, and the forces driving the changes.

Many business thinkers have criticized corporate “short-termism” that discourages crucial long-term investments in intangible capabilities. Executive pay programs get much of the blame, as even “long-term incentives” last only three years, with the goals for each year’s tranche reset annually.

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.

Going public means adding structure and formality to many areas of a company. Part of that structure includes forming a compensation committee with a clear charter, delineated responsibilities, and a calendar of actions.

Brick-and-mortar retailers have faced a mounting set of challenges in recent years as they’ve sought to adapt to an increasingly omnichannel ecosystem. While the trend was slow-moving at first, the pandemic’s impacts on consumer behavior has been anything but—accelerating the growth of digital channels and driving changes from which there is no turning back.

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.