Service Type: Compensation Benchmarking
Executive Transitions — Key Questions Every Comp Committee Should Ask About Equity Treatment Upon Retirement
The Impact of Consolidation in the Energy Sector on Executive Compensation – Part 2
Trends in Executive Compensation
Podcast Summary: Market Data in Context
Best Practice: Benchmarking is Process-Driven
The Purpose of a Benchmarking Peer Group
IPOs and Executive Pay
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
The Continued Evolution of Oil Industry Compensation will be Evident in Upcoming Disclosures
LTI Grants in a Volatile Environment
How and Why Pre-Commercial Biotech CEO Pay is Different – Part Three: East Coast vs. West Coast
2020 Meridian Corporate Governance and Incentive Design Survey
Meridian Webinar: COVID-19’s Impact on Incentive Plans
How and Why Pre-Commercial Biotech CEO Pay is Different – Part Two: Founders vs. Non-Founders
Benchmarking in an Unusual Cycle
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
How and Why Pre-Commercial Biotech CEO Pay is Different – Part One: Tailoring Pay to the Business
Announced Pay Reductions
Meridian is currently tracking announced pay reductions within the oil and gas space. The largest number of reductions to date have been announced in the oilfield services sector. We’re planning on regularly updating this list and re-posting at https://www.meridiancp.com/insights/energy/ Oilfield Services, Equipment, and Drilling ▪ Forum Energy Technologies salary reduction 4/2 (deferred compensation suspension 6/10) … Continued
Boardroom Comp Under COVID-19
Pre-pandemic, board compensation practices had become static and homogeneous, even as the role of non-employee directors continued to expand—but that was before the pandemic launched a global economic crisis. CBM recently spoke with Jim Heim, a lead consultant with Meridian Compensation Partners, about how the market downturn, coupled with a clear desire on the part … Continued
Survey Results: Oil & Gas Workforce and Compensation Strategies
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
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
Executive and Director Pay Reductions
Over the last several weeks, as the global economy shut down, we have seen a steady stream of U.S. companies announcing store and facility closures, reduced hours for workers, layoffs and furloughs. In addition, in response to cash preservation needs, a desire to “share the pain” and to align with the shareholder experience, a number … Continued
Director Compensation: Key Considerations During COVID-19
Much like executive compensation, director pay will be met with institutional shareholder scrutiny in the months ahead. Investors and proxy advisors will scrutinize stock option awards, meeting fees, and whether board pay remains steady amid lay-offs and revenue declines. How should compensation committees navigate the challenges ahead? In this episode, Meridian Partner Bob Romanchek shares his … Continued
2020 Executive Compensation Trends and Developments
In the past year, several factors have driven change in the executive compensation landscape in the U.S. Each year, Meridian identifies key developments regarding how companies respond to these ever changing conditions. (Read last year’s survey here.) In 2019, numerous factors impacted the U.S. executive compensation landscape. An increased focus on environmental sustainability, diversity and inclusion … Continued
Survey Results: Oil & Gas Companies Contemplating Workforce and Compensation Strategies
Over the past couple weeks, energy companies have publicly announced actions to lower capital spending and reduce G&A costs in response to the COVID-19 pandemic and the Saudi/Russia price war. Over the last two weeks Meridian surveyed 45 companies in the E&P and Oilfield Service sectors to gauge the potential impact of these historic events … Continued
Director Compensation—What Public Boards are Considering in Light of Substantial Energy Price Declines and/or COVID-19
This will be the first in a series of updates that Meridian will produce, on potential impacts to executive and director compensation programs and related governance issues, from the economic turndown that has followed the COVID-19 pandemic, and the recent sharp decline in oil prices. Director Compensation Directors at many companies are currently looking at … Continued
COVID-19
First and foremost, we hope you, your families and your colleagues are staying safe and healthy during this global health crisis. We appreciate normal business operations for many companies have been upended due to the COVID-19 pandemic. Only through the extraordinary efforts of employees, executives and boards will companies be able to manage through the … Continued
Oil & Gas Crisis Response: 2020 Compensation Responses will lead to Sustained Changes
Mere weeks after boards approved compensation outcomes from 2019 performance, there’s a temptation to revisit or change those outcomes under the lens of 2020 performance. We believe that in the large majority of cases, those 2019 outcomes should stand on their own merits. Current events will instead impact 2020 outcomes – meaningfully. We believe the … Continued
Revisiting Board Pay in a Time of Crisis
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
Fostering Diversity in Board Pay Practices, Part Two
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
Fostering Diversity in Board Pay Practices, Part One
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 … Continued
Why Pre-IPO Peer Groups are (or at least should be) Different
Most compensation committees review information gathered from a customized peer group of companies as part of compensation program development and relative performance reviews, and peer group construction is often a matter of significant debate. Common sense would suggest that if the goal is to understand what is competitive pay to attract and retain and motivate … Continued
Market Data in Context
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 appropriately motivate executives. When proxy season ends, many companies will review market benchmark pay data … Continued
Executive Compensation in the Banking Industry
Introduction This is Meridian’s fifth year tracking executive compensation practices at U.S. banks with assets above $10 billion. One theme remains consistent: programs continue to evolve. As we entered the 2018 year, companies invested much time and energy calculating the CEO pay ratio and preparing for its disclosure. The Tax Cut and Jobs Act eliminated … Continued
Trends in Compensation: Committee Chairs & Lead Directors
Compensation trends for lead directors and committee chairs have been interesting to follow in the years after Sarbanes-Oxley. Audit committee chairs were the first to be rewarded with higher pay; compensation committee chairs quickly followed suit as issues like Say on Pay came to the forefront. Yet, we still see a significant gap in pay … Continued
Addressing Increased Scrutiny on Director Compensation: A Call to Action
Until recently, outside director compensation has not been subject to similar scrutiny primarily due to the narrow range of pay practices for directors, in both pay value and design/delivery. However, a new heightened level of scrutiny is now being applied to outside director pay. This has prompted many companies and their boards of directors to … Continued
CEO Compensation in the Largest US Companies
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 to company performance. The main components of CEO compensation for large US-based companies are base … Continued
Preventative Care for Executive Compensation Programs
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 to the design of their executive compensation program. As a result, companies may not conduct … Continued
Should Compensation Committees Seek CEO Input When Deciding CEO Pay?
Determining CEO pay is one of the most visible decisions the compensation committee and board will make. CEO pay decisions communicate the board’s perspective on both the CEO’s and the company’s performance to employees, shareholders, and other external observers. Shareholders and proxy advisory firms primarily focus on CEO pay when evaluating whether to support the … Continued
Hot-Button Board Compensation Issues
Board compensation is always a hot topic for directors, with outside director compensation, lead director compensation, equity grants, the actual value of outside director pay and instances where companies have been sued for excessive outside director pay all front-burner topics. In the video above, Corporate Board Member recently sat down with Bob Romanchek, partner with Meridian Compensation Partners to talk … Continued
Vesting Doesn’t Make Sense
It usually perks up the ears of most corporate directors when you say “board compensation.” What’s happened recently in this area, particularly with equity grants? If you take a step back, outside director compensation has generally been in a pretty narrow range, value-wise. Looking back over the past five to seven years, it’s averaged about … Continued
Avoiding Action on Director Pay
A wave of lawsuits surrounding director compensation surfaced a couple of years ago, often alleging “excessive” pay for boards of directors on a variety of grounds. Because boards set their own pay levels, there are potential legal ramifications due to the “self-dealing” nature of director compensation. While lawsuits were settled and subsequent litigation has subsided, … Continued
2017 Trends in Outside Director Compensation
The key highlights from Meridian’s 2017 Outside Director Compensation study among Fortune 100 companies include: In 2016, total compensation increased modestly at 1.2% Annual cash retainer values were flat for the second consecutive year, but equity values increased at approximately 2.9% per year. Equity comprises 60% of total compensation, while board meeting fees now comprise … Continued
Compensation Committee Best Practices: Pay Increases & Goal-Setting
Meridian Partner Matthew Isakson joins TK Kerstetter, host of Inside America’s Boardrooms, to discuss “Compensation Committee Best Practices: Pay Increases & Goal-Setting.” [embedyt] http://www.youtube.com/watch?v=bRPVdmcqfyo[/embedyt] Get more insight into compensation committee goal setting from Matt Isakson and Boardroom Resources here: “4 Guiding Perspectives for Compensation Committee Goal Setting.”
Bigger Shoes to Fill
Find this article and more in the most recent issue of Equilar C-Suite magazine. Find past issues of C-Suite at Equilar.com. Boards walk a fine line to align director pay with shareholder value By Ryan Villard Boards of directors bridge the gap between investors and their executive teams, providing guidance and holding management accountable … Continued
Are You Paying Your Lead Director Appropriately?
Looking at larger companies’ practices for compensating outside directors, lead directors are typically provided a cash retainer of approximately $30,000 for performing this role in addition to the regular outside director pay package. This retainer is oftentimes the same or slightly higher than the extra retainer provided to the audit committee chair. In comparison, the … Continued
Choosing the Right Performance Peer Group
More and more public companies are adopting performance share unit (PSU) plans as a significant component of long-term (equity) compensation for executives.[1] The most common PSU performance metric is total shareholder return (TSR – i.e., stock price growth plus dividends) compared to performance peer companies. The choice of performance peers has a significant impact on … Continued
Pay Considerations When Hiring a New CEO From the Outside
In this article from Corporate Board Member‘s Board Governance Series, Bob Romanchek, Partner, discusses pay considerations when hiring a new CEO from outside the organization. This article, which is a condensed, edited version of a webcast available online, is designed to supplement boardroom discussion. A full video presentation and the associated webcasts are available from … Continued
Developing Effective Peer Groups
The Basics Companies conduct executive compensation benchmarking for a number of reasons, mainly to provide the compensation committee with an objective evaluation of the competitiveness of the company’s compensation levels and programs. Peer groups can be useful in helping compensation committees understand the amounts of target pay opportunity and actual pay delivered to executives at … Continued
Best Practices in Benchmarking
The Basics What is compensation benchmarking? Compensation benchmarking is the process of comparing a company’s compensation levels and practices against those of other companies (i.e., the “market”). In order to benchmark compensation, you must define, value, analyze and summarize market data and compare the market data against the target company. The output of compensation benchmarking … Continued
Outside Director Compensation
Overall Compensation Design Non-executive members of corporate boards are generally paid for their service. The overall compensation structure typically includes an annual retainer, committee meeting fees and/or retainers, and a non-retainer equity grant. In recent years, many companies have adopted a structure with a higher retainer and no meeting fees. The actual level of pay … Continued