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    Insight Type: Key Insight

    IPOs and Executive Pay

    By Adam Swietek

    As the equity markets have recovered and continued to grow since the financial crisis, many private companies are considering an initial public offering (IPO) of their stock as a way to raise capital and create liquidity for their existing investors and employees. Many companies have been taken private by private equity investors over the past … Continued

    Benchmarking in an Unusual Cycle

    By Adam Swietek

    We expect that the typical fall benchmarking/market data process will look different for many oil & gas companies. The current commodity price and general economic environment will likely impact compensation levels across much of the industry, which will cause a few challenges when companies review survey data. ■ Industry volatility will likely impact peer group … Continued

    Banking Industry Response to COVID-19

    By Adam Swietek

    Introduction The 2020 Coronavirus (COVID-19) pandemic represents one of the most significant global events in recent history, resulting in unprecedented impact on our country’s economy, its businesses and its people. For our financial services clients, initial priorities focused on the safety of employees and customers. At the same time, many banks were thrust into the … Continued

    Predicting the Future of E&P Bonus Design

    By Adam Swietek

    E&P bonus plans have historically aligned with growth and investment, focusing on volume (production and reserves) and cost reduction, measures that are more controllable by management and less impacted by commodity prices than earnings-based metrics. In recent years, investors and analysts have been increasingly critical of E&P bonus payout misalignment with shareholder returns and financial … Continued

    Survey Results: Oil & Gas Workforce and Compensation Strategies

    By Adam Swietek

    Key Takeaways In our March survey results we reported an overwhelming majority of companies focused on emergency business actions and less on compensation considerations. As of the end of April, it appears companies have taken action on their now identified workforce and compensation strategies. Outlined below are some of the key takeaways. Impact on the … Continued

    Announced Retail Executive and Outside Director Pay Reductions

    By Adam Swietek

    Since the onset of the COVID-19 pandemic in the U.S., Meridian has monitored the unprecedented actions taken by retailers to enhance financial flexibility and offset the substantial impact to operations associated with prolonged store closures. These actions have included eliminating non-essential capital expenditures, drawing down revolving lines of credit, suspending dividends and share buybacks, eliminating … Continued

    How should oil & gas companies approach their 2020 annual bonus?

    By Adam Swietek

    “Wait and see” seems to be the mantra of the day, particularly when it comes to an energy company’s annual bonus plan. We think that’s a prudent approach for the moment, as much uncertainty remains among the energy industry and broader economy. However, as we think forward a few months, what alternatives might companies consider … Continued

    The Impact of Recent Pay Actions on Severance Arrangements

    By Adam Swietek

    These actions have included pay reductions, work furloughs, and layoffs. Among other matters, companies likely need to evaluate the impact of these actions on severance benefits. Multiple types of arrangements provide for cash and other benefits in the event of an employee’s or executive’s severance, including severance plans, severance guidelines, employment agreements, severance agreements, and … Continued

    Bracing for a New Disclosure Rule on Executive Pay for Performance

    By Adam Swietek

    A new and mandatory executive pay proxy disclosure requirement is about to hit. A remnant of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, this pay-for-performance disclosure rule will become effective for most public companies shortly after the US Securities and Exchange Commission (SEC) officially posts the final rules and a related comment … Continued

    Revisiting Board Pay in a Time of Crisis

    By Adam Swietek

    There is a clear appetite to set the right tone at the top as business leaders balance (a) keeping their workforce and customers safe and healthy with (b) navigating supply chain uncertainty and weakened demand for their products and services. The timing of this crisis—just as many calendar-year companies are planning for annual shareholder meetings … Continued

    Compensation Implications of the Current Environment

    By Adam Swietek

    That was rough… The week of March 9, 2020 may have marked the single worst week for oil and gas stocks on record. A lot has changed, and the only thing certain is that more change will come. Here is what we feel confident of: ■ E&P companies will re-set 2020 capital programs; early announcers … Continued

    The $1 Salary: Lessons Learned

    By Adam Swietek

    Periodically we receive requests from our clients to profile advantages, challenges, and best practices associated with administering pay programs that combine a very modest base salary with large equity grants. The $1 Salary Plan is the most extreme version of this approach, and the symbolism of such a program has proven attractive to a handful … Continued

    Ready to Expand Your Clawback Policy? Not so Fast . . .

    By Adam Swietek

    More recently, many have stopped waiting. In public company boardrooms across the United States and abroad, there is a growing trend to expand company clawback policies beyond current regulatory requirements to include additional triggers for addressing employee misconduct through the use of their clawback rights. The focus on clawbacks is in large part a result … Continued

    How Should Environmental, Social and Governance (ESG) Performance be Reflected in Executive Compensation?

    By Adam Swietek

    Many of the public company boards and corporate executives (very notably, 181 CEOs signing the Business Roundtable Statement avowing Stakeholder primacy1) that are eager to demonstrate this responsiveness cite compensation as an existing, meaningful and highly visible tool that is increasingly being used to reward or penalize executives for ESG performance. The reality, however, is … Continued

    Fostering Diversity in Board Pay Practices, Part Two

    By Adam Swietek

    In recent years, we have observed a remarkable level of homogenization of compensation practices for non-employee directors, even as what is expected from board members of public companies continues to evolve and—generally speaking—expand. In our client work, we have also noted a great deal of diversity in the role that the board is expected to … Continued

    Executive Pay Outreach

    By Adam Swietek

    Historically, a company’s communication with investors has been centred around the quarterly tion of financial business results and forward-looking guidance, along with year- end results. However, developments over the past several years have led companies to engage with major institutional investors on a more frequent and individualized basis on executive compensation matters. The case for … Continued

    Prepping Your Clawback Policy for Prime Time

    By Adam Swietek

    In the wake of corporate scandals and high-profile executive misconduct, compensation committees are reviewing the adequacy of their clawback and forfeiture policies. Board members want to be assured they have the tools needed if they find themselves in the headlines. The original clawback provision under Sarbanes-Oxley requires only the CEO and chief financial officer (CFO) … Continued

    Time to Check Your Equity Incentive Plan Share Reserve

    By Adam Swietek

    This increase in share use also means that equity incentive plan reserves will drain at a faster rate, and may run out sooner than expected. Companies often ask for more shares when there is roughly enough left in the plan to cover one more year of normal cycle equity awards, in order to have a … Continued