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Coronavirus-Impacted Pay Plans: What to do Now?

By Randi Morrison posted 03-18-2020 09:30 PM

  

Highly recommended for management and compensation committees - "The Impact of COVID-19 on Performance-Based Compensation Programs" - from Paul Weiss discusses numerous alternative approaches to addressing the challenges associated with establishing or adjusting (as the case may be) performance-based pay metrics and targets in view of the significantly changed and evolving circumstances that have in many cases rendered prior budgets and forecasts obsolete. In addition to noting upsides and downsides associated with different approaches, the memo raises other relevant key considerations including employee morale, say-on-pay, accounting considerations, pay structure/components, and special bonus programs for companies that may decide for whatever reason not to adjust existing goals, but still realize the importance of incentivizing and rewarding employees and executives for their dedication and focus during a time of extraordinary instability.

          See also "The Impact of COVID-19 on Incentive Compensation" (Shearman & Sterling), "Annual Equity Awards in the Wake of the Coronavirus" and "Don't Panic" (Pearl Meyer), and "Coronavirus and Political Unrest: Determining Compensation in Uncertain Times" (NACD BoardTalk); and additional resources on our Executive Pay and Compensation Committees pages. This post first appeared in the weekly Society Alert!
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