Resource Library Articles

Compensation committees can benefit from understanding the target-setting practices of S&P 500 companies.

Though it’s often viewed the other way around, examining how you pay for work can sometimes illuminate better ways to do the work itself.

Whether sparked by technological innovations, geopolitical events or leadership transitions, most companies will undergo a major transformation at some point. During such transformational periods, incentive programs are a powerful tool that can help organizations align toward new goals, motivate employees, and drive performance.

The new pay vs. performance (PVP) disclosure requirement from the U.S. Securities and Exchange Commission (SEC) has not made a big splash yet, but it still has the potential to reshape the executive pay landscape as time goes on.

The best advisors find solutions that lead to stronger business outcomes, superior leadership, and smarter governance.

Executive compensation can be a sensitive issue at the best of times, but particularly when governance failures allow executives to realize substantial rewards in cases of gross misconduct or shortsighted decision-making.

Compensation topics can often be diagnostic tools, revealing deeper issues such as skill gaps, misaligned incentives and cultural challenges.

Most companies reach a point where performance stalls or the business does not get as many “wins” as it would like. During these periods, boards and management teams narrow their focus on refining the business strategy to overcome obstacles and achieve desired wins. An important concurrent step is aligning the company’s incentive strategy with the opportunities pursued.

Does pay drive and motivate specific performance outcomes? Or is the goal to align payouts with results, ensuring that leaders are rewarded for performance outcomes?

The most compelling trends of this proxy season emerge from a deeper analysis of companies that received less than 75% support in addition to those that failed. Insights from this group reveal where investors, proxy advisors, and other stakeholders may have heightened expectations in the future.

Boards must acknowledge exec comp's impacts and take steps to mitigate effects on the company.

In the first of this three-part series, we examine three case studies that show how executive compensation discussions catalyze value creation by highlighting misalignment or unsubstantiated assumptions.