Partner Sue Schroeder was recently quoted in a recent Wall Street Journal article about New York’s pay transparency law. The new measure requires all New York employers to list pay on job postings, along with internal transfer or promotion opportunities. Schroeder explains how pay will be all over the map since it is something that has been done behind the scenes for years. She explains the complexity behind pay determination and how most large companies have roughly 15 salary grades within their pay programs.

Partner Kelly Malafis was quoted in a Wall Street Journal article that discussed how companies are paying out special awards to retain executives in this tight labor market. She explained in the article that it is much easier to pay executives these special awards if the company is performing well. However, if the company is performing poorly and/or the stock price is decreasing, then these award might be harder for investors to digest.

A CAP report was referenced when discussing anticipated increased board of director pay. Partner Dan Laddin predicts that as the year progresses, we should expect more boards reviewing their director pay programs and approving increases. The report showed that about 15% of boards decided to reduce director pay during the height of the pandemic last year, typically suspending cash compensation.

Partner Susan Schroeder predicts that the remote workforce is here to stay and brings along a shift in compensation structures. She warns that unless pay differentials are properly disclosed and communicated, companies could be liable for equity and gender discrimination. Additional areas companies have to consider include further personalizing perks and moving towards project-based bonuses.

Median pay for finance chiefs at the largest U.S. companies rose 7% during the 2020 fiscal year, largely driven by stock-based compensation. According to Partner Melissa Burek, the decision for boards to modify their pay plans amid the pandemic is not easy and requires good judgement. Approximately 30% of S&P 1500 companies that have held their annual meeting already modified their bonuses due to COVID.

CEO pay kept climbing in 2020 as some companies moved performance targets or modified pay structures in response to the pandemic and accompanying economic pain. Principal Shaun Bisman notes that the number of changes seen in incentive plans is unprecedented. In some cases, investors have responded by withholding support for company pay practices in annual advisory votes.

Partner Susan Schroeder affirms that, over the course of the pandemic, roughly a quarter of public companies have cut executive pay to some degree. However, as the economy continues to recover, larger companies have been more likely to restore pay levels while smaller firms are still struggling.