Resource Library Articles

Leadership transitions have emerged as a focal point for boards contending with rising rates of executive turnover and external appointments to top leadership positions, a trend that is expected to continue throughout 2024.

Will outgoing CEOs stay as a mentor to the new CEO, transition to a board role or depart entirely? Regardless of the role, each path will affect the organization's stability and strategic direction.

Pay for performance is a core principle governing compensation program design. However, excessive market volatility and unfavorable macroeconomic or business-specific conditions can result in investment constraints, lower revenue or profitability, and a depressed equity valuation.

Companies can assess their progress on a spectrum of metrics (including broader sustainability and human capital measures) and determine whether to adjust their incentive plans in response – and, if so, how.

Market volatility and downward pressure on valuations will affect board-level discussions of executive stock ownership.

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.