Insights

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

Companies are responding to increasing pressure from shareholders, proxy advisors, employees, and even local and state governments to consider environmental, social and governance (ESG) issues as part of business strategy and performance.

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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…

Drafting a Modern Equity Incentive Plan

With the 2020 proxy season approaching, many public companies are readying new or amended equity plans for shareholder approval.

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These plans are a ubiquitous feature of public companies’ compensation programs. They allow companies to grant various types of equity and equity-based awards to their non- employee directors, executives and other key employees. Although equity plans are broadly similar, companies…

Fostering Diversity in Board Pay Practices, Part Two

In this two-part series, we examine the current state of board compensation and whether it accommodates evolving governance practices.

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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…

Compensation Committees: Good Governance Process Leads to Effective Decision-Making

Compensation Committees (“Committees”) are held to the highest legal standard when setting the compensation of executive officers.

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That is, Committee decision-making must pass muster under fiduciary standards to be defensible and withstand judicial scrutiny. To meet these fiduciary standards, Compensation Committees should have in place a robust governance process from which to develop sound compensation determinations and…

Top Ten Design Considerations When Drafting a Modern Equity Incentive Plan

With the 2020 proxy season approaching, many public companies are readying new or amended equity plans for shareholder approval.

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These plans are a ubiquitous feature of public companies’ compensation programs. They allow companies to grant various types of equity and equity-based awards to their non- employee directors, executives and other key employees. Although equity plans are broadly similar, companies still…

Executive Pay Outreach

From the Volume 2 2019 issue of CEO Magazine...The continued scrutiny of executive compensation coupled with the rise of shareholder activism has prompted many US companies to consider specific strategies around shareholder communications. In response, Bob Romanchek and Tom Ramagnano, partners at Meridian Compensation Partners, provide effective solutions and independent advice for executive compensation and corporate governance.

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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…

ISS Issues Final Policy Updates for 2020

On November 11, 2019, Institutional Shareholder Services (ISS) issued final updates to its proxy voting policies for 2020 and on November 21, 2019, ISS issued further guidance in its preliminary FAQs for 2020 compensation policies. The updates represent an incremental change to existing ISS policies and the implementation of phased-in policies related to non-employee director compensation and board gender diversity.

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Final Policy/Process Updates for 2020 ISS has made the following modifications to its U.S. pay-for-performance assessment for 2020: ■ Easing the quantitative concern thresholds under its initial three-part comparative quantitative analysis of CEO pay and company performance, and ■ Using…

SEC Issues Proposed Rules Regulating Proxy Advisory Firms

On November 5, 2019, the Securities and Exchange Commission (“SEC”) issued proposed rules that would impose a new regulatory regime on proxy advisory firms (“PAFs”).

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Since the SEC held its roundtable discussion on the proxy voting process in November 2018, the SEC has indicated that it was poised to issue proposed rules regulating PAFs. The issuance of the proposed rule represents the culmination of a…

Managing Disclosure on Personal Use of Corporate Aircraft

Personal use of corporate aircraft remains a popular perquisite among many of the largest public companies.

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In addition to getting executives to important business destinations and enabling them to work proactively while traveling, many companies provide top executives the opportunity to use the corporate aircraft for non-business purposes, including travel to outside company board meetings, spousal…

Meridian Promotes Two New Partners

Meridian Compensation Partners is pleased to announce that Jon Szabo (Dallas) and Virginia Rhodes (Atlanta) have been elected to join the partnership effective January 1, 2020.

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Each year Meridian evaluates partner candidates based on a broad range of important criteria covering personal attributes, outstanding client service and consulting skills, financial contributions and personal values. Jon helped launch Meridian in 2010, and has been a strong contributor…

Planning CEO Transitions: Compensation Committee Best Practices

Partner Jared Berman spoke with TK Kerstetter of Diligent's Inside America's Boardrooms and outlined best practices for boards that have the luxury of time.

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When it comes to CEO transitions, boards should be prepared for the “hit by a bus” scenario. But what about the other side of the spectrum (i.e., a planned departure of a long-tenured CEO)? If you have the luxury of…

Prepping Your Clawback Policy for Prime Time

As seen in the November/December 2019 issue of the NACD Director Advisory

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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.…

Career Congratulations to John Anderson

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Meridian Compensation Partners LLC congratulates John Anderson on his recent retirement from the firm and partnership. John has been a true cornerstone of our firm and his contributions as an executive compensation and corporate governance advisor have helped build Meridian…

Report on Say on Pay and Select Shareholder Proposals For the 2019 Proxy Season

Meridian Compensation Partners, LLC is pleased to provide this periodic report on key voting results for the 2019 proxy season.

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Executive Summary 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, and ■   Analysis of Vote Results on Select…

Time to Check Your Equity Incentive Plan Share Reserve

With depressed energy stocks, more shares are now needed to maintain recent levels of employee equity awards.

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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…

2019 Meridian Corporate Governance and Incentive Design Survey

For the ninth straight year, Meridian Compensation Partners, LLC has conducted an extensive Survey of 200 large cap companies (“Meridian 200”) to identify trends on a variety of executive compensation and corporate governance topics. Discussed below are the results of the Survey.

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The Survey provides current market practices, recent trends and key competitive benchmark data that should assist companies in the review of their executive compensation program designs and related corporate governance policies. Highlights of Meridian’s 2019 Corporate Governance & Incentive Design…

Fostering Diversity in Board Pay Practices, Part One

In this two-part series, we examine the current state of board compensation and whether it accommodates evolving governance practices.

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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,…