Partner Margaret Engel was featured in an article discussing the Tornetta v. Musk decision and its potential impact on how the Elon Musk is paid. The article discusses potential changes to executive compensation planning, equity incentives to large stockholders, CEO pay magnitude, alignment between executive compensation and shareholder interests, and lessons from this case regarding good (and bad) governance.

Partner Eric Hosken participated in a panel discussing the advantages / disadvantages of total shareholder return (TSR) as a basis for executive compensation. The discussion took place at MLR Media’s Character of the Corporation conference.

Partners Eric Hosken and Dan Laddin discuss how succession planning, ESG, and the election season will affect compensation as we move toward 2025. The new year is off to a strong start, coming off a stronger-than-expected fourth quarter of 2023 and a positive start to the year in the stock market. The picture is not all positive though since 2024 is expected to be a highly charged political year with a contentious presidential election, uneven economic recoveries globally and continued conflicts in the Middle East and Ukraine. Uncertainty is something that compensation committees will continue to struggle with in 2024.

A CAP report detailing CEO pay levels among 50 companies with fiscal years ending between August and October 2022 was recently referenced to by Directors & Boards. The report revealed that median CEO total direct compensation was up 4% when compared to the same period in 2021. The report also revealed that overall fiscal year 2022 financial performance was up by approximately 10% while total shareholder return was down by 16%. This report was authored by Partner Lauren Peek and Principal Joanna Czyzewski. Read the full report here.

Recently, Partner Matt Vnuk led a Q&A at MLR Media’s Character of the Corporation Conference discussing the topic of executive compensation. Directors & Boards published an excerpt from the panel in their newsletter discussing bonus programs and metric prevalence and review. Members of the panel included Beth Albright, Compensation Committee member and Audit Committee member at Darling Ingredients and Dawn Zier, Compensation Committee Chair at Prestige Consumer Healthcare.

Following the published CAP report analyzing early filers compensation data, author Ryan Colucci was recently interviewed by Directors & Boards and took a deeper dive into the findings. Colucci shared that CEOs and CFOs most often receive salary increases when warranted from a competitive market perspective. Recent findings show approximately 80% of each group received an increase however, the magnitude of these increases was slightly higher for CFOs than CEOs, on average. Read the full Q&A here.

Partners Dan Laddin and Eric Hosken’s article on 2023 Compensation Committee priorities was published by Directors & Boards this week. The article explains their predictions in light of the impending high degree of economic uncertainty. Some priorities listed include pressure-testing incentive plan goals, ensuring appropriate equity incentives, addressing new regulatory requirements, and navigating a challenging shareholder environment.

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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