Resource Library Articles

Compensation committees must balance wanting to reward executives for adding value to ongoing operations despite external setbacks, with maintaining alignment to the shareholder experience and the integrity of the incentive program.

We explore the IAC's recommendations, why they could be a big deal for investors, and questions boards can ask to prepare for these potential changes.

ESG metrics are increasingly prevalent in incentives, but disclosure has not kept pace. In recent years, the prevalence of ESG metrics in executive compensation design has expanded.

While cybersecurity is an untraditional risk, there are learnings and principles from the financial crisis that boards would be wise to reflect on and incorporate into a more robust and systematic approach to cybersecurity risk.

The companies that succeed will strike the right balance between motivating leaders with incentive plan goals and ensuring fairness amid growing investor scrutiny.

Russell 3000 equity plan proposals are facing historically low shareholder support and higher failure rates in 2023. These headwinds likely reflect both increased shareholder and proxy advisor expectations in equity plan sizing and increased share usage pressure at companies in depressed markets.

Following an extensive internal diagnostic, companies can focus on key HCM areas including, but not limited to, performance management; succession planning; diversity, equity, and inclusion (DE&I); and culture.

Organizations that lead in DE&I devote meaningful energy from a strategic perspective by aligning DE&I with business strategy, dedicating sufficient resources, and emphasizing accountability.

While we don't anticipate immediate clarity on these questions, we see this as an opportunity for companies to reflect on their DE&I policies, practices, and metrics to ensure they align with business and communication strategies.

Directors with human capital expertise can be invaluable at a time when the “war for talent” is raging.

The absence or misalignment of well-executed DE&I initiatives can introduce unintended challenges, potentially derailing the achievement of objectives.

Competitive pay benchmarking, incentive goal rigor analyses, and more traditional realizable pay analyses provide a more exhaustive set of tools to calibrate and assess pay and performance.

It would be prudent for companies to look closer at their equity grant practices and policies and, where they have not done so already, adopt policies providing for grants during “open windows.”