Agenda – Incentive Pay Under Fire

Sen. Elizabeth Warren (D-Mass.) has Wells Fargo & Co. in her cross hairs again. Last week newly elected board chair Stephen Black received a letter from the Massachusetts senator asking for details on CEO Charles Scharf’s compensation incentives, including specific metrics regarding governance and regulatory compliance targets and Scharf’s performance against them. On the same…

Agenda – Investors Ask: Are CEOs Special Enough for Special Awards?

Note to boards: Consider the diminishing marginal returns of incentive grants on top of incentive grants. You should not have to bribe a CEO to stay in the job. Companies in the industries hardest hit by the pandemic granted extra long-term incentive awards to executives last year, according to a report from Compensation Advisory Partners….

An Unpersuasive Argument Against ESG Targets in Executive Compensation

In the Wall Street Journal, Alex Edmans argues against ESG targets in incentive compensation. Here’s why he’s wrong (but a little right). He is a little bit right in saying that “The evidence shows that paying for targets encourages executives to hit those targets. But it doesn’t necessarily encourage them to improve performance. The crux…

Australia: CEOs take record hit on bonuses

Bonuses of blue-chip company bosses took the biggest hit on record last year, with nearly a third of ASX 100 CEOs receiving no annual boost to their base salary. Some 31 ASX 100 chiefs received no annual bonus in 2020, double the number from the year before. Among them were those running businesses savaged by…

Agenda – Considering ESG Pay Targets? Europe Offers Clues

Last year, U.S. companies trailed their European peers in tying environmental, social and governance metrics to their executive pay packages. Yet many businesses may need to prepare for regulatory changes requiring American companies to make such disclosures in the future, according to advisory firm Pay Governance LLC. The Pay Governance study showed that 22% of…

Huge Paydays for C.E.O.s, as Gap With Workers Widened

The New York Times reports on “a blowout year” for CEO pay. Even in a gilded age for executive pay, 2020 was a blowout year. A comprehensive survey of the 200 highest-paid chief executives at public companies conducted for The New York Times by Equilar, an executive compensation consulting firm, revealed some of the biggest…