Over on TheCorporateCounsel.net we blogged about ISS’s “Annual Policy
Over on TheCorporateCounsel.net we blogged about ISS’s “Annual Policy
LinkedIn Facebook Twitter Email Contact Card
Compensation in Context Newsletter
VERITAS EXECUTIVE COMPENSATION CONSULTANTS
San Francisco
    Chicago
    New York
    Washington D.C
415-618-6060
www.veritasecc.com

ISS Policy Survey: Questions on Executive Compensation


Share This Email:
Share via Email Share on Twitter Share on Facebook Share on LinkedIn


August 17, 2020 



Thanks to Lynn Jokela


Over on TheCorporateCounsel they blogged about ISS’s “Annual Policy Survey”, which it announced late July. Like last year, ISS is using a single survey with a limited number of questions to help streamline the process. Even though the process is streamlined, it still covers a broad range of topics, including compensation topics related to pandemic adjustments. Check out the survey to see all topics covered, but here are two compensation-specific questions:
(1) As a result of the many impacts of the COVID-19 pandemic, many decisions regarding executive compensation and performance expectations, including both short-term and long-term, will be made by boards and by shareholders during the remainder of 2020 and throughout 2021.
Which of the following most closely reflects your organization’s view of executive compensation in the wake of the pandemic? Possible responses include, in addition to a free-form answer:
  • The pandemic is different from previous market downturns and many boards and compensation committees will need flexibility to make decisions regarding reasonable adjustments to performance expectations and related changes to executive compensation.

  • The pandemic’s impact on the economy, employees, customers and communities and the role of government-sponsored loans and other benefits must be considered by boards, incorporated thoughtfully into compensation decisions to adjust pay and performance expectations, and should be clearly disclosed to shareholders.

  • The impact of the pandemic is not substantially different from other major market downturns, such as the financial crisis of 2007-2008, and decisions regarding performance and executive pay should reflect actions taken to promote a return to profitability and financial health over a reasonable timeframe without significant short-term adjustments to performance expectations or executive compensation.
(2) With respect to short-term executive incentives, many companies have announced changes to their immediate annual incentive or bonus programs in response to the COVID-19 pandemic and the resulting general economic downturn.
Regarding short-term/annual incentive programs, which of the following best represents your organization’s view of what is a reasonable company response under most circumstances? Possible responses include, in addition to a free-form answer:
  • Making mid-year changes to annual incentive metrics, performance targets and/or measurement periods to reflect the changed economic realities.

  • Suspending the annual incentive program and instead making one-time awards based on committee discretion.

  • Both the first and second response could be reasonable, depending on circumstances and the justification provided.

  • Companies should avoid mid-year adjustments and make payouts based on the original program design.
As always, the policy survey is just the first step as ISS formulates its 2021 voting policies. In addition to the survey, ISS will gather input via regionally-based, topic-specific roundtables and conference calls. From there, interested market participants can comment on the final proposed changes to the policies.
    Veritas Executive Compensation Consultants, ("Veritas") is a truly independent executive compensation consulting firm.

    We are independently owned, and have no entangling relationships that may create potential conflict of interest scenarios, or may attract the unwanted scrutiny of regulators, shareholders, the media, or create public outcry. Veritas goes above and beyond to provide unbiased executive compensation counsel. Since we are independently owned, we do our job with utmost objectivity - without any entangling business relationships.

    Following stringent best practice guidelines, Veritas works directly with boards and compensation committees, while maintaining outstanding levels of appropriate communication with senior management. Veritas promises no compromises in presenting the innovative solutions at your command in the complicated arena of executive compensation.

    We deliver the advice that you need to hear, with unprecedented levels of responsive client service and attention.

    Visit us online at www.veritasecc.com, or contact our CEO Frank Glassner personally via phone at (415) 618-6060, or via email at fglassner@veritasecc.com. He'll gladly answer any questions you might have.

    For your convenience, please click here for Mr. Glassner's contact data, and click here for his bio.
    VERITAS EXECUTIVE COMPENSATION CONSULTANTS
    powered by emma
    Subscribe to our email list.