The Advisors' Blog

– Lynn Jokela

Not long ago, I blogged about increased workloads for compensation committees.  As issues related to the Covid-19 pandemic continue, a recent KPMG memo says investors are looking for compensation committees to increase oversight of human capital management issues.  With health and safety issues top of mind, the memo says it’s increasingly important for compensation committees to ensure compensation incentives align not only with long-term value creation but also with workplace safety and corporate culture.  Here’s some of the what the memo says about broadening compensation committee oversight:

– Consider expanding the committee’s focus to include human capital management in addition to traditional compensation matters

– Review the committee title and charter against current oversight activities and consider whether any changes are needed

– Consider whether to incorporate nonfinancial or sustainability metrics into executive compensation plans

– View shareholder proposals on compensation issues as a bellwether

– Be mindful of changes to proxy advisors’ assessments of executive compensation policies

– Help ensure long-term incentives are aligned with sustainable long-term value creation

– Expect greater scrutiny of director pay

– Leverage disclosures and shareholder engagement to tell the company’s story about compensation