The Advisors' Blog

This blog features wisdom from respected compensation consultants and lawyers

March 23, 2020

More on “Unusual Executive Compensation Approach”

– Lynn Jokela

A couple of weeks ago, I blogged about an unusual compensation program adopted by one company and this Meridian blog discusses another program – one where the CEO takes $1 in salary along with large equity awards.  The blog discusses advantages, challenges and logistics – perhaps during the current cycle it might be something more comp committees consider – and CEOs may like the symbolism.  Some of the advantages mentioned in the blog include:

– Sends a clear signal of faith in the future of the company – CEO believes in the company’s long-term value potential

– The program will underscore management’s commitment to managing cash

– Focus is long-term thinking – value realized through innovation and expansion take precedence over short-term margin expansion or efficiency capture