July 25, 2016 Executive Compensation Executive & Director Pay Design Articles

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Executive & Director Pay Design

When Did Long-term Incentives Become So Short-term?

Published July 25, 2016
Published July 25, 2016

Many leaders in the business, academic, and investment communities have been lamenting corporations’ increasingly short-term focus.

Many factors are cited as causes of this short-termism: the market’s obsession with quarterly earnings; activists pushing companies to return cash to investors through share buybacks and dividend increases at the expense of long-term investment; and management’s fear of investments that may not pay back, or pay back quickly enough, especially in an uncertain, slow-growth economic environment.

However, we see another driver. Business heads, daunted by the prospect of setting long-term goals, have largely acquiesced to a surprising notion: when it comes to their pay, long-term is defined as no more than three years. That notion has come about since the Dodd-Frank reforms and Say on Pay voting, which prompted most compensation committees to use three-year goals in their long-term plans. But three years” that’s simply not long term.

View the full article as it was originally published.

Seymour Burchman

Seymour Burchman

Senior Advisor

Seymour Burchman has over 20 years of experience in executive compensation, where he advised clients on reinforcing key strategies and improving shareholder value through the identification of performance measures and goal-setting processes. He has served companies across a wide range of industries, including financial services, healthcare, high technology, and publishing.

Industry Experience

  • Financial Services
  • High Technology and Publishing
  • Healthcare

Featured In

  • The Conference Board
  • Workspan
  • Harvard Law School Forum on Corporate Governance
  • NACD Directorship Magazine
  • Harvard Business Review
  • Directors & Boards
  • Advancing the Dialogue

Authored Insights

Blair Jones

Blair Jones

Managing Director

Blair Jones has 30 years of executive compensation consulting experience. She has worked extensively across industries and has deep expertise in advising boards on company transitions, significant investor concerns, and an expanding human capital management mandate. Before joining Semler Brossy, Blair was the practice leader in Leadership Performance and Rewards at Sibson and an Associate Consultant at Bain & Company.

Blair holds the designations of Certified Benefits Professional (CBP), Certified Compensation Professional (CCP), and Certified Executive Compensation Professional (CECP). Blair has been named to the D100, NACD Directorship Magazine’s annual list of the most influential people in the boardroom for 10 consecutive years (2013–2022). Blair serves on the Mohawk Valley Healthcare System’s foundation board and is the Women’s Giving Circle leader. She also serves on the advisory board for M3 Placement & Partnership.

Of Interest

Named to the D100, NACD Directorship Magazine’s annual list of the most influential people in the boardroom community, including directors, corporate governance experts, regulators, and advisors, for eight consecutive years (2013–2020).

Industry Experience

  • Retail
  • Fortune 100 Companies
  • Turnarounds
  • Consumer Products
  • Automotive
  • Companies Undergoing Transformation
  • Aerospace and Defense
  • Healthcare

Featured In

  • NACD Directorship Magazine
  • Equilar C-Suite
  • Corporate Board Member
  • Agenda
  • The Corporate Board
  • Harvard Business Review
  • Bloomberg
  • Directors & Boards
  • The Conference Board
  • NASPP
  • Workspan
  • Harvard Law School Forum on Corporate Governance

Authored Insights

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