November 18, 2020
ESGAUGE released today its new live database of public company incentive plan changes prompted by the COVID-19 pandemic. The database is part of the suite of benchmarking analyses on executive compensation on which ESGAUGE is collaborating with The Conference Board and compensation consulting firm Semler Brossy. It expands the product on salary reductions that was launched in May 2020, a few weeks after the onset of the pandemic.
While the COVID-19 crisis has fundamentally altered the business environment across industries, only 6% of companies in the Russell 3000 Index have announced changes to their incentive compensation plans to date. Moreover, the types of changes made to compensation plans – such as reducing the target or maximum payout, or even cancelling the plan – indicate that executive bonuses for 2020 are on track to be lower than pre-pandemic expectations.
“Those businesses that were severely harmed by the pandemic may have no choice but to grant some degree of discretion to compensation committees making the final annual payout determinations—so that they can modulate pay-for-performance according to the specific circumstances they face,” said Satender Singh, Chief Operating Officer at ESGAUGE. “If so, what matters is that the company be transparent about the criteria that will be used to exercise such discretion—some type of resiliency scorecard or some other framework for measuring the accomplishments of executives who are leading the business on the road to recovery.”
Read the press release at https://prn.to/3cUmvU0
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