Insights

Pay for Performance

From Volume 1 Chief Executive Officer Magazine...Partner Andrew McElheran and Lead Consultant Andrew Stancel explain what pay for performance should mean to corporate boards and management teams.

Posted by and on

Over the past ten years or so – since the widespread adoption of shareholder ‘say on pay’ votes on executive compensation at public companies in the US and elsewhere – arguably no single idea has animated the analysis and design…

Market Data in Context

Benchmarking compensation is the process of comparing pay levels and incentive design practices to the “market.”

Posted by on

It is a quantifiable, objective way for a compensation committee to gauge how an executive is positioned versus the market, and helps the committee to understand what competitive pay is and if compensation arrangements are adequate to attract, retain and…

Let’s Push Things Forward

Reprinted from Chief Executive Officer Winter 2018 - With long-term incentives being the largest pay component for CEOs in the US, where are design practices heading?

Posted by on

For well over 50 years, there has been the same three general design categories of long-term incentives for US-based CEOs. These have been full-value share grants, which vest over time and focus on retention; stock appreciation vehicles, such as stock…

CEO Compensation in the Largest US Companies

Reprinted from Chief Executive Officer Magazine - Volume 1 2018

Posted by on

Are US CEOs overpaid? Bob Romanchek, senior partner at the executive compensation consulting firm Meridian Compensation Partners, adds clarity to the issue by looking at the components of pay, the historic levels of total pay opportunity and the critical relationship…

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.

Posted by on

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,…

Performance-Based Long-Term Incentives: What Have We Done?

From January/February 2018 NACDonline.org - Executive incentive design has grown incredibly complex. Boards should consider simplifying by aligning pay with long-term stock price performance.

Posted by on

Are you satisfied with the design and operation of your company’s performance-based longterm incentive program for top executives? Chances are you are not. In chasing that ever-elusive pay-for performance vehicle design, you may have gone from stock options to performance…

Bringing Pay for Performance Into Focus Requires the Right Lens

By Annette Leckie and Charles Grace - Reprinted from the November/December 2017 issue of NACD Directorship magazine

Posted by and on

Savvy investors understand the value of a strong management team and are willing to pay handsomely—if company performance warrants. It’s important to design executive pay to reward great performance and penalize poor performance. In our experience, most directors strive to…

Despite Strong 2016 Shareholder Returns, Certain Energy Companies Struggle with Say on Pay

In 2016, the oil and gas industry generated positive returns for shareholders, but in 2017 oil and gas companies lagged general industry in Say on Pay support.

Posted by on

ISS recommended against 18% of oil and gas companies vs. 12% for the entire Russell 3000, and 3% of oil and gas companies failed Say on Pay (i.e., <50% support) compared to only 1% in the Russell 3000. ISS recommended…

Competing Pay Perspectives

From C-Suite Magazine, an Equilar publication: Issue 24, Summer 2017

Posted by on

CEO pay can be calculated a number of ways—which one is “right?” CEO pay is on its way up. Again. Or it’s not—depending on how you want to look at it. The release of publicly reported compensation during “proxy season”…

Report on Say on Pay and Select Shareholder Proposals for the 2017 Proxy Season

Meridian Compensation Partners, LLC is pleased to provide this periodic report on key voting results for the 2017 proxy season.

Posted by on

About This Material Specifically, this report will cover the following areas: Standard & Poor’s (S&P) 500 Say on Pay (SOP) Vote Results and Analysis Russell 3000 SOP Vote Results and Analysis Analysis of Vote Results on Select Shareholder Proposals Highlights…

IS A THREE-YEAR PERFORMANCE PERIOD REALLY LONG-TERM?

Tom McNeill and Jon Szabo of Meridian Compensation Partners, LLC discuss how three years being the standard for "long-term" incentive is not really long-term at all.

Posted by and on

Find this article and more in the NYSE Governance Services Corporate Board Member Magazine – nyse.com/governance Over the last 10–15 years, we have observed a sea change in long-term incentive (LTI) award design. The role of stock options has dramatically…

How Pay Drives Performance

Meridian analyzes effective pay programs and explains what companies can learn from them.

Posted by and on

High performing banks execute customized strategies that deliver results. They have the vision, leadership, culture and incentive programs that help to attract, motivate and retain top talent. Leaders of high performing banks articulate their strategic direction with laser focus, communicate…

Ask the Expert: Pay for Performance Alignment

Meridian Partner Marc Ullman discusses this 2016 hot button issue with Equilar's C-SUITE magazine.

Posted by on

As part of its Ask the Experts feature, Meridian Partner Marc Ullman was recently asked to discuss a hot button compensation issue for 2016 by Equilar’s C-SUITE magazine. Read Marc’s commentary on Pay for Performance Alignment in the current issue…

Setting Incentive Plan Goals: Embrace Uncertainty!

Steps directors can take to keep incentive plans motivational in a climate of uncertainty.

Posted by on

The Holy Grail in executive compensation is to achieve strong alignment between pay and performance. In the quest to achieve this alignment, management teams and board members strive to design the perfect incentive structures, using the most appropriate performance measures…

Forecasting Key Compensation Issues

Experts examine current compensation trends to predict tomorrow’s top concerns.

Posted by on

“The key to making a good forecast,” statistician Nate Silver noted in his 2012 book “The Signal and the Noise: Why So Many Predictions Fail—But Some Don’t,” “is not in limiting yourself to quantitative information. Rather, it’s having a good…

Testing Pay for Performance

Why feedback on pay for performance alignment is important and how to analyze it appropriately.

Posted by and on

A key pillar of most compensation philos­ophies is to pay for performance, but how do directors know if it’s working? To an­swer this question, compensation commit­tees are increasingly testing the pay and performance alignment after the payouts have been made.…

Horses for Courses

How compensation committees can choose the performance metrics that are right for their business.

Posted by and on

Incentive plans have two primary purposes: 1) To motivate behaviour and drive performance aligned with strategy and 2) To align rewards with shareholder interests. From these two simple purposes come the most difficult work of the compensation committee and an…

10 Myths of Executive Compensation

Letting go of misconceptions about this function will enable boards to build stronger programs.

Posted by on

Hiring and retaining the right hospital leaders and ensuring that they achieve the organization’s goals are among the board’s most important functions, and executive compensation plays a major role in the success of those efforts. However, preconceived notions about executive…