Partner Kelly Malafis, Principal Mike Bonner, and Principal Shaun Bisman shed light on how discretionary incentive plans can enhance pay and performance relationship when used correctly. Discretion provides the compensation committee with the flexibility to make decisions that reflect the overall performance of the bank while considering the impact of external factors on performance results and strategic accomplishments that may not lend themselves to formulaic assessments. They suggest every bank should consider if there is a role for discretion in their plans to optimize alignment between pay and performance.

Principal Shaun Bisman was recently quoted by Bank Director in their article about retention bonuses. Bisman shares that publicly held companies might consider tying a retention grant to the firm’s financial performance in some way since they are held accountable to proxy advisory firms and investors. This year, proxy advisory firms Glass Lewis and ISS issued guidance recommending that shareholders vote against executive compensation packages when retention grants were not tied to performance metrics.

In this article, Founding Partner Kelly Malafis, Principal Shaun Bisman, and Principal Mike Bonner address bank compensation committees. They list three issues that bank compensation committees should focus on: the rising cost of talent, the uncertain economic outlook, and the link between environmental, social, and governance (ESG) issues and human capital and compensation.

Partner Kelly Malafis and Principals Shaun Bisman and Mike Bonner discuss compensation considerations when comparable banks merge as one. They note that developing the human capital strategy and compensation program at the pro forma bank is a key factor for the management teams and boards to consider. The newly executed compensation philosophy should guide how the bank pays its employees and a common approach for many merged banks to tie the team together is to provide a long-term incentive award.

Principal Shaun Bisman, Senior Associate Mike Bonner and Partner Kelly Malafis identify key items that banks must consider to provide continuity in leadership and successful execution of priorities when turnover occurs in the CEO role today.

Partner Kelly Malafis, Principal Shaun Bisman, and Senior Associate Michael Bonner dive into clawback triggers and how a more robust clawback policy can benefit shareholders.

Partner Kelly Malafis and Principal Shaun Bisman discuss how banks are aligning incentive-based compensation with strategic priorities.

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Jun 06, 2024

Where SEC Rule-Making, Shareholder Reporting, and Plan Design Collide

Boston, MA

The SEC has issued a flurry of new rules covering insider trading, clawbacks, proxy reporting, and more. These rules have plan design implications and,…
  • Daniel Laddin

Jun 06, 2024

Striking the Right Balance: Discretion in Incentive Plans – Taboo or a Must?

Boston, MA

Discretion is often considered taboo in the executive compensation world. Compensation committees that use discretion in determining incentive payouts risk receiving criticism from investors…
  • Shaun Bisman

Jun 06, 2024

Impact of Market Volatility on Executive Compensation

Boston, MA

Volatile economic conditions can lead to uncertain compensation outcomes for employees which can create an environment where there is little retentive value. During this…
  • Kelly Malafis
  • Michael Bonner