By Adam Swietek
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
By Adam Swietek
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
By Adam Swietek
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
By Adam Swietek
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.”
By Adam Swietek
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
By Adam Swietek
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
By Adam Swietek
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
By Adam Swietek
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
By Adam Swietek
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
By Adam Swietek
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
By Adam Swietek
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
By Adam Swietek
Selection of Market Data Sources A thorough evaluation of available market data sources is critical to ensure that market data results reviewed by the compensation committee are credible and meet the objectives established at the beginning of the benchmarking process. In some situations, a single market data source may be all that is needed to … Continued
By Adam Swietek
This update reviews trends in executive pay at S&P/TSX 60 companies[1]. The general trend for the last three years has been for modest growth in actual and target pay, although actual senior executive pay fell slightly from 2013 to 2014. Performance share units (PSUs) continue to increase as a proportion of long term incentive compensation, … Continued
By Adam Swietek
Governance policies related to executive compensation are on the rise as a result of increased influence of bank regulators, shareholders and the Securities and Exchange Commission (SEC). These policies are intended to reduce compensation-related risk, encourage a long-term perspective and align executives with shareholder interests. Meridian’s 2015 proxy research of banks with $10 billion to … Continued
By Adam Swietek
Hiring and retaining the right hospital leaders and ensuring that they achieve the organization’s goals are among the board’s most important functions, and executive compensation plays a major role in the success of those efforts. However, preconceived notions about executive compensation may hurt hiring and retention efforts. By taking a closer look at 10 long-standing … Continued