Inside The Covid Cut: Executive Compensation 2020-21 Special Report

Every year, there’s a lot of misinformation when it comes to executive compensation. The headlines typically focus on public companies—and, more specifically, on Fortune 500 CEOs. Lumping all chief executives and senior executives in together based on this small subset, as if they’re some homogeneous pack, is, of course, intellectually lazy. But more pragmatically, the lack of information for private companies across all revenue ranges—which form the largest part of American enterprise—means many organizations make uninformed and reactive compensation decisions. READ MORE

Middle Market CEOs See 20% to 50% Reduction in Base Pay During COVID-19

Executive and board director compensation practices have come under more scrutiny as a result of the pandemic. BDO USA, LLP has released two separate reports, one on CEO and CFO compensation and one on board compensation, which explore how compensation levels and practices changed in 2019 and the extent to which the global health crisis has altered compensation practices. READ MORE

ISS Publishes New FAQs on COVID-Related Compensation Decisions and Provides Guidance on Other Governance Matters

On October 15, 2020, Institutional Shareholder Services, Inc. (“ISS”) published preliminary FAQs1 providing general guidance as to how ISS may assess COVID-related executive compensation decisions as part of its regular pay-for-performance qualitative evaluation for the upcoming proxy season. Based on feedback obtained by ISS during investor roundtables and responses to ISS’ annual policy survey, the FAQs are intended to inform investors, companies, and their advisors on COVID-related executive compensation issues, and have been released ahead of ISS’ regular annual compensation FAQs, which are anticipated to be published in December 2020.  READ MORE

The attraction and retention paradigm

The importance of employee attraction and retention on overall business success is an often-debated issue. Although two very divergent schools of thought exist — either employees as assets or employees as expenses — everyone agrees on one thing: Employees are necessary to operate a business and employees want to feel valued. It has been proven that failing to address the most important factor in operating a business (i.e., your people) will ultimately result in the demise of a company — or at the very least, the risk of reputational harm. READ MORE

The Idea That Raising Wages Destroys Value Is A Fallacy

Its predictability doesn’t make it any less perplexing. Time and again Wall Street analysts will criticize a company for raising wages at the alleged expense of shareholders, and the stock will take a hit. Shortly thereafter, as the benefits of the wage increase begin to pay off – in the form of more engaged and productive employees, happier customers, better retention, etc. – the stock recovers and goes on a tear. Fears of margin compression subside. The returns on that investment in human capital become clear. Shareholders are satisfied. READ MORE