The Advisors' Blog

– Liz Dunshee

According to this 11-page Pearl Meyer memo, these are the “Top 5” emerging agenda items for compensation committees this year:

1. Expanding Role: CEO pay ratio, gender and other diversity-based pay inequities, talent development and culture-related concerns are pushing the boundaries of traditional compensation committee responsibilities

2. Non-Financial Metrics: They may not be right for all companies but given the increasing interest in non-financial metrics and the possibility that they could further your business strategy, a robust discussion on the subject should be included in your 2019 compensation committee’s agenda

3. Relative Total Shareholder Return: TSR is probably here to stay but satisfying external stakeholders while maintaining any incentive value of an rTSR-based awards is challenging – some companies are feeling pressure to modify these plans

4. Director Pay: Given the increased discussions regarding board diversity, education, and refreshment and additional board and committee responsibilities, committees may want to—or need to—rethink their director pay programs

5. Expect & Prepare for Unexpected Plan Issues: Remember good plan design—and good executive compensation governance—includes planning for the unexpected. Inevitably there will be things that you haven’t fully anticipated, but thoughtful preparation for the “known unknowns” and brainstorming “black swan” events can help the board mitigate future risk