CAP Principal Ryan Colucci was quoted in Agenda discussing the Board research he performed. One of the findings highlighted in the article discusses how Board leaders are less likely to serve on the audit committee because of the specialized expertise required of the role. Audit committees require chairs with more hard skills and experience with financial statements, as opposed to nom-gov and compensation committees that rely on softer, less mechanical skills.
Principal Shaun Bisman was quoted in Agenda’s recent article discussing how companies are getting creative with LTI plans. Bisman sheds light on the fairly uncommon approaches he’s seen and forecasts bonuses to pay at or below target.
Joanna Czyzewski discusses how monitoring executive pay ratios can be a helpful tool in managing your talent strategy. CAP reviewed CEO and other named executive officer pay across S&P 500 for the most recent fiscal year and discovered at median, CEO pay was 2.3x the next most highly paid NEO. For every $1.00 paid to the next most highly paid NEO, the CEO was paid approximately $2.30.
Partners Dan Laddin and Matt Vnuk were quoted in Agenda’s recent article discussing Director Pay research. Dan and Matt discuss the growing demands of Board leadership roles and the potential increase of retainers. They mention that lead director pay has moved a little more aggressively than board chairs but some boards are reluctant to address below-market pay for individual roles as it could cause the company to stand out for the wrong reasons. Generally, directors need to know the increase is reasonable from a market perspective.
Partner Matt Vnuk and Associate Kyle White were quoted in Agenda’s recent article discussing Tesla’s recent board compensation settlement. Tesla’s board of directors recently agreed to turn over $735 million and make their non-employee director compensation contingent on an annual vote from unaffiliated shareholders. The concessions are part of a proposed settlement to end claims that directors “grossly” overpaid themselves. They mention that as a best practice, directors should strive to compensate themselves in line with other similarly sized companies, which is likely to result in less “push back”. Directors do not want their compensation to be a distraction to the organization.
Principal Shaun Bisman was quoted as in Agenda’s recent article discussing the Supreme Court’s recent decision to strike down race-based college admissions at Harvard. Shaun mentions that companies need to determine if they are willing to support these goals in compensation, if they can adequately measure progress, and to what degree do they want to communicate and hold executives responsible for progress.
Partner Kelly Malafis and Principal Shaun Bisman were quoted in Agenda’s recent article discussing discretionary bonuses amid performance woes. Bisman sheds light on the discussions about the potential recession that have been ongoing for the past 12 to 18 months. He believes it’s too early to tell if there is going to be a recession or not, but compensation committees need to focus on business as usual and focus on shareholder alignment. Malafis shares that the July or August meeting is often the time for committees to hold discussions about performance measures and incentive plan design for the following year.