Breakout Session: Current Issues in Compensation

This session will review the latest trends in executive compensation, including the current practices on tying pay to performance; the shifting focus of incentive pay from traditional performance metrics to emphasize other key strategic initiatives, such as meeting diversity, equity, and inclusion (DEI) or other environmental, social, and governance (ESG) objectives; best practices for compensation committee process; clawback provisions; and the changing opinions (and power) of institutional investors and others on matters of executive compensation. The panelists will examine changes to incentive structures that some boards have adopted to constrain or “re-align” executive pay, particularly in response to the global pandemic and the resulting economic downturn and uncertainty. Will structural changes that allowed for more end-of-year discretion and broader consideration of stakeholders beyond just the shareholders remain after the economic recovery? Additionally, should boards revisit CEO clawback provisions and potentially expand the definition of “cause” beyond traditional financial misconduct to include more types of reputational harm to the company? This discussion will provide directors with additional tools and insights to engage in more effective strategic thinking and execution on compensation matters.