COVID-19: Another Look at Initial Reactions to Executive Pay
Survey data seems to be coming out pretty regularly now as companies continue thinking about what to do with executive and director pay as uncertainty about the effects of COVID-19 continues. For another look, Semler Brossy recently published a report looking at how companies and boards are responding to the crisis when thinking about executive comp. The continued uncertainty makes it all the more important for compensation committees to carefully deliberate any potential actions they might take relating to executive compensation.
The most recent report is based on data gathered from over 100 companies representing a broad set of industries and highlights current actions taken and those in consideration for late 2020 and 2021. The report says so far, there is no universal response. Many companies are delaying action until there is more clarity and companies that have taken action are doing so out of necessity. Here are some of the findings; check out the report to see more detail:
– Most respondents have already set goals for 2020 bonuses and of those, 63% expect to use discretion to adjust payouts
– 40% are considering resetting performance goals part way through the year once the effect of COVID-19 is better understood
– Most respondents have already made 2020 equity grants and don’t anticipate making any in-flight changes at this stage
The report also includes data on the impact of COVID-19 on the broader employee population, timelines for pay reductions and employee populations impacted by pay reductions.
-Lynn Jokela, CompensationStandards.com April 23, 2020
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