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    COVID-19 and Short-Term Incentive Designs

    By Kristin Kentra

    Our Meridian Client Update published May 28, 2020 discussed the impact of COVID-19 on 2020 Short-Term Incentive (STI) plans and how Committees may determine appropriate payouts (if any) at year-end. Payout decisions for 2020 STI in many instances will be impacted and driven by liquidity constraints, affordability, relative performance and/or investor expectations. The design for … Continued

    Long-Term Incentives: Before, During and After COVID-19

    By Kristin Kentra

    In response to the constantly evolving COVID-19 pandemic, companies have announced a litany of executive compensation-related actions including layoffs, furloughs, base salary reductions and much more. For long-term incentives (“LTI”), most companies have adopted a “wait and see” approach with respect to issues like: modeling implications of a V, W or U-shaped recovery; valuing existing … Continued

    Compensation Committees: What to Do With 2020 Bonus Plans?

    By Kristin Kentra

    At the onset of COVID-19, the popular advice for adjusting annual bonus pay was to “wait and see.”  Now several weeks in, some companies have begun restructuring bonuses. What actions are they taking? In this episode, Chris Havey, Partner & Lead Consultant with Meridian Compensation Partners, explains what he’s witnessing across corporate boardrooms right now: … Continued

    Banking Industry Response to COVID-19

    By Kristin Kentra

    Introduction The 2020 Coronavirus (COVID-19) pandemic represents one of the most significant global events in recent history, resulting in unprecedented impact on our country’s economy, its businesses and its people. For our financial services clients, initial priorities focused on the safety of employees and customers. At the same time, many banks were thrust into the … Continued

    Stock Ownership Guidelines in Challenging Times

    By Kristin Kentra

    Stock ownership guidelines are nearly universal for both executives and directors. They help ensure alignment with shareholders by encouraging executives and outside directors to hold onto a substantial amount of company stock. They have historically not required a substantial open-market purchase of company stock. Rather, both executives and directors can typically meet their required guidelines … Continued

    In-Flight Long Term Incentives—What, if Anything, Should Energy Companies be Doing?

    By Kristin Kentra

    The energy industry has some particular challenges with long-term incentives (LTI): • Multi-year equity value decline: Many energy companies entered 2020 with multiple years of underwater stock options and equity awards tracking well below their original grant date value. • New shocks to the system: COVID-19 has exacerbated the long term supply and demand imbalance … Continued

    Predicting the Future of E&P Bonus Design

    By Kristin Kentra

    E&P bonus plans have historically aligned with growth and investment, focusing on volume (production and reserves) and cost reduction, measures that are more controllable by management and less impacted by commodity prices than earnings-based metrics. In recent years, investors and analysts have been increasingly critical of E&P bonus payout misalignment with shareholder returns and financial … Continued

    COVID-19 and Short-Term Incentives

    By Kristin Kentra

    For many companies, it is unlikely that there will be significant (if any) payouts under the executive or managerial bonus plans for 2020. Alternatively, for those that do have payouts, it is similarly unlikely that plan mechanics alone will determine final earned awards. Rather, most will have to apply some degree of discretionary adjustments in … Continued

    Survey Results: Oil & Gas Workforce and Compensation Strategies

    By Kristin Kentra

    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

    Director Compensation: Key Considerations During COVID-19

    By Kristin Kentra

    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

    By Kristin Kentra

    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