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Compensation: Quiet Before the Storm?

Why now is the right time for an executive compensation audit. As seen in Corporate Board Member Fourth Quarter 2019.

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Compensation committees fared well in the 2019 proxy season, with the vast majority of Russell 3000 companies receiving support on their compensation programs from proxy advisors and shareholders. Yet, compensation programs continue to be a hot=button issue for stakeholders, with…

Managing Executive Incentive Programs for Chemical Companies

Designing and managing effective compensation programs is challenging for chemical industry companies due to the highly cyclical and global nature of the business.

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This article offers some useful context and information for compensation committees and management teams of chemical companies to consider when designing and managing their executive pay programs. In particular, we cover key attributes of the industry and their impact on…

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.

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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…

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?

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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…

Should Companies Use Individual Performance Measures in Executive Annual Incentive Plans?

When evaluating whether including an individual performance component is appropriate, companies may want to consider some questions.

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According to the Meridian 2017 Governance and Incentive Design Survey1, 43% of Meridian 200 companies use an individual performance component in their executive annual incentive plan, typically as a supplement to financial measures. Actual usage may be higher as the…

Setting Goals to Incent High Performance

As seen in the 3rd Quarter 2018 issue of Bank Director

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High-performing banks define and execute their strategic vision by clearly articulating what they want to achieve and how they will do it. The old adage, “what gets measured, gets done”, is true when it comes to incentive plans. Companies that…

Compensation Advisors Deliver Advice on Taxes, Culture, and Big Investors

Reprinted editorial coverage from Leading Minds of Compensation–South, which is running in the May/June 2018 issue of NACD Directorship magazine.

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Regardless of how complex the process for setting and reporting on executive pay becomes, or how simple some critics believe the process should be, one truth reigns: money motivates. That was the theme when a panel of directors and compensation…

Preventative Care for Executive Compensation Programs

Reprinted from the May/June 2018 issue of NACD Directorship magazine

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In many cases, U.S. public companies receive a high level of support from shareholders for their annual advisory vote on the executive compensation program. Based on these results, companies often conclude there is no need to make any material changes…

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.

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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…

Managing Incentive Plans in a Cyclical Business

As seen in Corporate Board Member First Quarter 2018 - Compensation is always tricky, but it’s even tougher in an up-and-down business, where markets—as much as the managers—run the show. Jim Wolf, managing partner at Meridian Compensation Partners, offers advice on getting it right.

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There is no more contentious, complex or difficult issue for boards than setting up the right incentives for executives. With companies in cyclical businesses that may have commodity costs as a large portion of performance, the challenge gets even more…

Lessons From Wells Fargo: Forfeiture and Clawback Policies

The Wells Fargo & Co. sales incentive fraud scandal has further increased the scrutiny on banking industry compensation practices.

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As published in BankDirector.com By: Susan O’Donnell, Daniel Rodda| SEPTEMBER 13TH, 2017 Since 2010, banks have followed the Interagency Guidance on Sound Incentive Compensation Policies and reviewed their incentive plans to ensure they do not motivate inappropriate risk taking. However,…

Compensation Committee Best Practices: Pay Increases & Goal-Setting

Watch Meridian Partner Matthew Isakson on TK Kerstetter's Inside America's Boardrooms.

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Meridian Partner Matthew Isakson joins TK Kerstetter, host of Inside America’s Boardrooms, to discuss “Compensation Committee Best Practices: Pay Increases & Goal-Setting.” Get more insight into compensation committee goal setting from Matt Isakson and Boardroom Resources here: “4 Guiding Perspectives…

Rewarding Executives for Successful Bank M&A

Aligning rewards with value enhancement will help shareholders understand the rationale behind them.

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This article originally appeared on BankDirector.com. Mergers and acquisitions (M&A) can create significant value for shareholders. Accordingly, bank executives should be rewarded when completing and integrating successful transactions. However, in today’s environment of heightened executive pay scrutiny, some approaches to…

2016 Corporate Governance & Incentive Design Survey

Read Meridian's findings and learn about new market practices and trends that will inform best practices for the next year and beyond.

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Executive Summary As companies review their executive compensation programs and related corporate governance policies, it can be helpful to understand common market practices and trends that may signal “best practices.” In order to inform these perspectives, Meridian’s 2016 Corporate Governance…

Executive Compensation in the Banking Industry

Emerging Trends and Best Practices for 2015-2016

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This is Meridian’s third annual white paper on trends impacting the banking industry (see our 2014-2015 and 2013-2014 white papers). Our paper represents data from Meridian’s review of 2015 proxies for U.S. banks with assets between approximately $10 billion and…

Compensation Specialists Advise on IPOs and Spins

As an initial public offering (IPO) nears for a private company or an operating division of a public company, compensation planning must include preparing for the executive compensation transition issues the company must undertake after the offering

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From the July/August 2016 issue of NACD Directorship Visit NACDonline.org As one of the largest independent advisory firms, Meridian Compensation Partners is uniquely positioned to guide committees through pivotal events such as IPOs, spins, or separations where a company is…

Effective Use of Discretion in Annual Incentives

Analyzing bonus payout outcomes of publicly traded E&P companies.

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Going into 2015, annual incentive goal-setting was challenging for oil & gas companies, to say the least. E&P companies were wrestling with lowering production, where production growth is traditionally a cornerstone E&P bonus metric. Services and drilling companies were experiencing…

Bank Regulators Issue New Proposed Rule on Incentive Compensation

The new rule applies to institutions with assets of $1 billion or more, and will likely go into effect in 2019.

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The National Credit Union Administration is the first of a group of six federal bank regulators[1] to make available a joint proposed rule on incentive compensation arrangements maintained by financial institutions. Initially, these bank regulators issued a jointly proposed rule…

Annual Incentive Basics

Looking at how annual incentive plans are typically designed.

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The primary purpose of an annual incentive plan, also called an annual bonus plan, is to drive and reward behaviors that have an impact on the operating success of the company. Following is information on how such plans are typically…