The purpose of this Post is to highlight whether Compensation Committees should be offering retention packages to their executive officers to discourage their being poached by another company.  This Post is Part 4 of a 7-Part series addressing compensation adjustments that Compensation Committees could consider in order to continue to incent and retain their executive officers in today’s economy.

Background

Many executives are suffering from depressed realizable pay levels.  This makes sense because a performance-driven compensation model would weight most of an ...

This post is part of a 7-part series addressing compensation adjustments that Compensation Committees could consider in order to continue to incent and retain their executive officers in today’s economy.  The titles of each of the 7-parts in this series are listed at the bottom of this post.   This Part 3 is entitled “Address Outstanding Performance-Based Equity Awards," and provides some alternatives that Compensation Committees could consider with respect to outstanding performance-based equity awards that have currently unachievable performance goals.  Such alternatives include (listed in no particular order, and not an exhaustive list):

This post is part of a 7-part series addressing compensation adjustments that Compensation Committees could consider in order to continue to incent and retain their executive officers in today's economy.  The titles of each of the 7-parts in this series are listed at the bottom of this post.   This Part 2 is entitled "Consider Changes to Increase Cash Flow," and provides some ideas that a Compensation Committee could implement that could work to increase the company's cash flow and produce positive proxy disclosure.  Such ideas are (listed in no particular order, and not an exhaustive list):

Today’s economic environment has resulted in substantial loss of value to many shareholders and executives of publicly traded companies (i.e., the latter losing substantial value in their stock holdings, and too, losing prospective realizable pay as a result of unattainable performance goals within their outstanding performance-based awards).  In most situations, the shareholders and the executives are aligned in such loss.  But a problem is that substantial loss at the executive level could increase undesired poaching and turnover of key executives at a time when executives should be focused on navigating the company through a reopening of the United States economy.  To overcome this problem, compensation committees of publicly traded companies ("Compensation Committees") will likely need to consider adjustments to the company’s compensation framework in order to continue to incent and retain executives.  To that end, this Part 1 (of a 7-part series) provides thoughts that the Compensation Committee should consider with respect to upcoming equity grants.

Just a quick update that on April 8, 2020, Institutional Shareholder Services ("ISS") published policy guidance reflecting certain adjustments due to the impact of the COVID-19 pandemic.  The guidance addresses how ISS's benchmark and voting policies may be applied in this new area of uncertainty.  In many cases, the guidance merely reiterates that ISS will respond to corporate actions on a case-by-case basis.  To address the topic, we published a client alert entitled "ISS Issues COVID-19 Guidance on Benchmark and Voting Policies."

On a separate note, two of my partners (Steven Haas

Join us on April 9, 2020 from 10:00 am to 11:00 am Central for our FREE monthly webinar on "Executive Compensation Considerations in Light of Market Volatility, Stock Prices and the Unknown," where we will discuss compensatory issues to consider as a result of failed (or failing) performance-based compensation metrics and lost value to the issuer's long-term shareholders, including:

• Considerations with respect to annual incentives for 2020;
• Thoughts with respect to outstanding performance-based equity awards where the performance conditions are not likely to be attained ...