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