The Advisors' Blog

We’ve posted the transcript for our recent webcast “Top Compensation Consultants Speak” with Blair Jones of Semler Brossy, Ira Kay of Pay Governance and Jan Koors of Pearl Meyer. They discussed:

– DEI Programs, Disclosures & Metrics: The Compensation Committee’s Role

– Plan Design & Goal Setting Amid Uncertainty & Volatility

– Key Changes in Investor & Proxy Advisor Policies & their Impact in 2025

– Metrics & Perks: Notable Observations from the 2025 Proxy Season So Far

– Compensation-Related Shareholder Engagement

– Did Dodd-Frank Rules Reduce or Curb CEO Pay or Change Incentive Design?

During the program, Blair shared these thoughts on the use of discretion and investor perspectives:

Discretion is still suspect. I expect we will, again, from a tariff standpoint, start to see more discretion being used, particularly on short-term incentive programs, just because short-term incentive goals were set before we knew the full impact of the tariffs. We knew they were coming, but we had no idea what the impact was going to be.

A number of clients are trying to get ahead of that and to think about how they might create a framework for what discretion might look like, developing a scorecard, for lack of a better term, where they can look at the things that are within their control. Just to give a few examples, it might include things like:

• How are you doing relative to mitigating the tariffs?
• How are you doing on a relative performance basis, not just on TSR, but on financial measures, on market share, on relative gross margin, on relative ROIC?
• Are you actually outperforming?
• Are there strategic initiatives related to customers or channels that you can continue to move forward?
• How are you performing operationally?

 

Discretion will be looked at with suspicion, but in order to have some basis for discretion around your business that is both compelling and does not play too strong a hand, you could think about it in terms of, “if you fall off your thresholds, or even if you’re right hanging at threshold, but you’ve outperformed your peers, there may be room for discretion.” We’ll have to see how the stock market performs and how shareholders feel.

Members of this site can access the transcript of this program for free. If you are not a member of CompensationStandards.com, email info@ccrcorp.com to sign up today and get access to the full transcript.

Programming Note: We won’t be blogging tomorrow in recognition of the Juneteenth holiday.  Our blogs will be back on Monday.

– Meredith Ervine