The COVID-19 pandemic has had an immediate and public impact on executive compensation. Many companies in economically devastated industries (e.g., airlines, hospitality, retail, oil and gas) have announced base salary cuts for CEOs and top executives. Beyond these hard-hit industries, almost all companies have suffered significant stock price declines over the month of March, leaving many past equity grants under water. In addition, financial objectives for outstanding long-term performance awards and for the 2020 bonus plan may no longer be attainable. Executive compensation professionals and compensation committees face difficult decisions in the remainder of 2020 about how to modify incentive plans to address the impact of COVID-19.
We will review decision-making processes as to whether companies should make reductions to executive base salaries or target compensation in 2020; limits on executive compensation under the CARES act, which companies are subject to the limits, and what open questions remain about rules interpretation; and think through ways to address the impact of COVID-19 on your annual incentive plan, and more.
In this session, you will:
- Understand approaches compensation professionals can take to assess the impact of COVID-19 on their outstanding compensation programs
- Gain insight into questions to answer before making changes to the compensation plan, including: what has COVID-19’s impact been on our business? How has COVID-19 impacted employees? Has the current economic situation heightened or lessened retention concerns?
- Learn about tools you can use to address the impact of COVID-19 on the annual incentive plan (e.g., 2nd half of year goals, recalibrated/adjusted goals to exclude COVID-19, discretion)
- Learn about approaches to address outstanding multi-year performance plans and how they depend on the specific measurement approach (e.g., financial measures vs. stock price, absolute vs. relative, measurement methodology, etc.)
- Learn about approaches to address decreases in the retentive value of equity (e.g., supplemental awards, award “true-ups”, option repricing/exchanges, etc.)
Eric Hosken | Partner, CAP
Eric Hosken is a partner of Compensation Advisory Partners LLC (CAP) in New York. He has over20 years of executive compensation consulting experience working with senior management and compensation committees. Eric was named to the National Association of Corporate Director’s Directorship 100 for his contribution and influence in boardrooms. Eric is a frequent speaker on the topic of executive compensation and teaches the subject for WorldatWork. He has also written extensively on the topic of executive compensation and performance measurement issues. He is the lead author of CAP’s “A Practical Guide to Compensation Committee Service: Lessons from the Field.”
Melissa Burek is a founding Partner of Compensation Advisory Partners LLC (CAP) in New York. She has 25 years of experience consulting with Boards and management in all areas of executive and director compensation, including compensation strategy, annual and long-term incentive plan design, performance measurement/reward linkages and regulatory and governance issues.
Melissa has assisted numerous Fortune 250 companies with developing compensation strategy and designing and implementing pay programs that support business objectives and shareholder interests. She has assisted companies involved in initial public offerings, restructurings and executive leadership changes. Melissa has significant experience in the insurance, manufacturing, consumer products, and pharmaceutical industries, as well as having worked with public and private companies.
Gillian Emmett Moldowan
Gillian Emmett Moldowan is a partner in the Compensation, Governance & ERISA practice. She advises companies, boards of directors, executives and investors on compensation and benefit matters, including equity-based incentives, deferred compensation programs and employment, retention and severance arrangements. Her practice focuses in particular on issues that arise at the intersection of human capital management and corporate governance and in securities offerings and mergers and acquisitions transactions. She regularly counsels clients on disclosure, trading rules (including Section 16) and the negotiation of executive employment arrangements. Gillian also advises on the applicability of federal securities law, tax law and general employment-related legal issues.
Brit Wittman, CCP, CECP, | VP Global Rewards, Applied Materials
Prior to joining Applied Materials, Inc., Brit served as General Manager of Executive Compensation at Chevron. he was responsible for the relationship with the Compensation Committee of the Board of Directors, as well as all aspects of compensation for its executives. He also managed a global team whose responsibility includes: benchmarking and salary planning, developing offers, deferred compensation and retirement, and the CD&A of the proxy. Brit is a member of the WorldatWork faculty and serves as chair of the WorldatWork Society of Certified Professionals Board.
COVID-19 Expert Insights: Members and nonmembers receive complimentary access to live and recorded sessions. Access to the live event is limited to the first 1000 participants, so be sure to log on up to 15 minutes prior to the event start time. If you miss the live event, playback will become available on-demand shortly after the event date.
All Other Expert Insights: Members receive complimentary access to live and recorded sessions ($149 for nonmembers). Access to the live event is limited to the first 1000 participants, so be sure to log on up to 15 minutes prior to the event start time. If you miss the live event, it will become available 30 days after the event date.