Our Insights

Advancing the Dialogue: Market-Based Framework for Adjustments

Today’s highly uncertain market presents a myriad of challenges when it comes to goal-setting for incentive plans. Over the course of a performance cycle, companies may find that the volatile operating environment may present a variety of unforeseen “headwinds” or “tailwinds” that make the established goals either too challenging or too easy. In this article we explore a market-based framework to automatically adjust plan targets on an “after-the-fact” basis if it is determined that the actual operating environment deviated significantly from the company’s original budgeting and planning assumptions. Conventional wisdom suggests that executives should always hold on to company stock earned through incentive plans. However, recent research conducted by Semler Brossy indicates that stock sales are relatively common practice for long-serving executives, and in this article we offer a principled approach which encourages appropriate diversification over time. Read the entire article (PDF) written by Seymour Burchman and Mark Emanuel. Read more

You’ve Failed Say on Pay—Now What?

Year-over-year changes in CEO pay have a greater effect on the likelihood of passing a future say on pay vote after a failure than shareholder engagement and program changes. Read more

Comp Committee Conversations

Semler Brossy’s Blair Jones and Broadridge Financial Director Stuart Levine discuss the conversations compensation committees should be having to establish optimum remuneration plans. Read more

Solving Incentive Formula Conflicts

How should boards handle situations where the incentive formulas indicate one payout, but directors believe another is more appropriate? Read this article by Barry Sullivan which originally appeared in NACD Directorship. Read more

Advancing the Dialogue: Getting the Most Out of Your Company’s Compensation Risk Assessment

As the 2013 proxy season gets under way, issuers must again assess the level of risk in their compensation programs – namely, issuers must evaluate whether or not their compensation policies and practices are reasonably likely to have an adverse effect on the company. Our experience suggests that for most companies, compensation risk assessment is a routine, “check-the-box” exercise that often fails to reveal the company’s compensation-related enterprise risks. In this article we outline a multi-faceted approach to compensation risk assessment that executives can employ to ensure the process is both thorough and “value-added.” Further, we detail four critical questions that an engaged Director should raise to ensure their company’s risk assessment is compliant, thoughtful, and comprehensive. Read the entire article (PDF) written by Blair Jones and Mark Emanuel. Read more