Emerging Trends in Measuring Performance for Executive Compensation
Posted by Andrew McElheran on March 10, 2021 in Video
Two significant trends are emerging in executive compensation, and they are somewhat in tension with each other.
In this clip, Andrew McElheran, Partner and Lead Consultant at Meridian, identifies these two trends and how they offer a broader array of performance indicators from which companies can select when building compensation plans.
The first trend is a growing interest in a stakeholder-centered view of the corporation. Rather than shareholders, stakeholders could include employees, customers, or the socio-cultural context in which a company operates. These metrics are often non-financial.
The second trend is an increased focus on returns on capital, or economic value added. This financial metric refers to excess profit above the cost of capital.
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