Partner Shaun Bisman and Principal Mike Bonner wrote an article for Bank Director detailing how banks can consider a variety of strategies to make their compensation programs more durable in this uncertain environment. They specifically highlight two primary categories: improving flexibility of core programs and awarding retention awards.

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.