Insights

Is it time for longer-term performance awards?

A variety of factors has escalated short-termism, including proliferation of technology and Wall Street’s relentless demand (and apparent rewards) for short-term profits.

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Short-termism: Acknowledging a Trend In his 2016 annual letter to CEOs, Larry Fink wrote: “I have written to the CEOs of leading companies urging resistance to the powerful forces of short-termism afflicting corporate behavior. Reducing these pressures and working instead…

Relative TSR Still Delivers Real Pay-for-Performance Alignment in the Oil & Gas Industry

Among the ten largest Oil & Gas production companies that have reported 2017-2018 compensation actions, each has either implemented or enhanced a financial returns metric for 2018 incentive compensation.

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The menu of industry annual incentive metrics (and some long-term incentive metrics) now includes several instances of ROCE, Cash ROCE, ROIC, estimated wellhead returns, and other non-GAAP measures of investment returns. Investors may welcome the incentive accountability to financial returns,…

2017 Trends and Developments in Executive Compensation

Meridian provides an overview of the current executive compensation and corporate governance landscape.

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Executive Summary As detailed in Meridian’s prior Trends and Developments in Executive Compensation Survey (2015 through early 2016), several factors were driving change in the executive compensation landscape in the U.S. These factors included market volatility, turmoil in commodity prices…

2016 Trends and Developments in Executive Compensation

Meridian provides an overview of the current executive compensation and corporate governance landscape.

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The landscape of executive compensation and corporate governance is constantly evolving. Each year, Meridian identifies key developments regarding how companies respond to these ever changing conditions. (Read last year’s survey here.) Meridian’s 2016 Trends and Developments in Executive Compensation Survey…

The Pros, Cons, and Misperceptions about TSR

Watch Meridian Partner Annette Leckie discuss these issues for the NYSE Board Governance Series.

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Watch Annette Leckie, Partner, discuss myths about total shareholder return (TSR) and the benefits and concerns of using this long-term incentive measure with Deborah Scally of the NYSE Board Governance Series.

Setting Annual Incentive Targets When Commodity Price Drops

One of the hardest challenges for a Compensation Committee is to set annual incentive performance targets at levels that are lower than the prior year’s actual performance.

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One of the hardest challenges for a Compensation Committee is to set annual incentive performance targets at levels that are lower than the prior year’s actual performance. It is difficult to explain to shareholders when share price is dropping, how…

Should bonus outcomes be different by level?

Insights into whether there should be different standards for executive bonuses than for the broader population, and whether executives shouldbe held to a higher standard of accountability to shareholders.

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In our experience, a large number of oil & gas companies provide the same bonus funding level for all bonus-eligible employees in the organization. There may be differentiation based on individual or business unit performance (horizontal differentiation) but no differentiation…