Adjusting Incentive Goals: When, Why and How

On today’s episode, we’re joined by Tina Murphy, Principal, and Daniel Rodda, Partner, at Meridian Compensation Partners, LLC. Daniel and Tina outline five essential agenda topics that compensation committees should consider adding to their calendars for 2025. These strategies focus on optimizing executive compensation practices, addressing shareholder concerns and ensuring long-term alignment with corporate goals.Key Takeaways:(02:49) Committees should add pay analysis, say on pay prep, share plan reviews, charter updates and program audits to 2025 agendas.(05:04) Realizable pay aligns pay with performance; holding power supports long-term retention and shareholder interests.(11:36) Modeling tests and addressing disclosure concerns reduce risks of negative say on pay recommendations.(17:31) Equity usage analyses balance talent strategy, shareholder interests and program sustainability.(21:32) Annual equity reviews track effectiveness; peer benchmarking can be periodic based on industry needs.(23:01) Annual charter reviews and human capital focus align committees with governance priorities.(26:48) Holistic audits keep compensation programs competitive, strategic and best-practice aligned.(29:11) Regular audits address regulatory changes and ensure severance plans and stock guidelines stay competitive.Resources Mentioned:Tina Murphy -https://www.linkedin.com/in/tina-murphy-8a63ab8/Daniel Rodda -https://www.linkedin.com/in/daniel-rodda-756b2b/Meridian Compensation Partners, LLC -https://www.linkedin.com/company/meridian-compensation-partners-llc/This episode is brought to you by Meridian Compensation Partners, LLC. Learn more by visiting MeridianCP.com. #Compensation #Wages #SPAC #Equity #ExecutiveCompensation #Clawback

On today's episode, we’re joined by Senior Consultant Sam Bricker and Compensation Consultant Tyler Papineau, both of Meridian Compensation Partners, LLC. Sam and Tyler discuss Meridian’s annual study on corporate governance and incentive design, covering trends in clawbacks, board refreshment and pay-for-performance disclosures. They also explore how companies adapt to new regulations and the evolving executive compensation landscape.Key Takeaways:(01:43) Overview of Meridian's corporate governance and incentive design study.(03:41) How companies expanded clawback policies beyond SEC regulations.(06:00) The increase in coverage for clawback policies across broader employee groups.(09:37) Board refreshment trends, including director tenures and overboarding policies.(11:48) The role of term limits and retirement ages in board refreshment.(14:46) How companies are disclosing pay versus performance, with a shift away from tailored disclosures.(17:17) The role of compensation committees in pay-for-performance discussions.(18:24) The continued use and evolution of TSR (total shareholder return) as a performance metric.Resources Mentioned:Sam Bricker -https://www.linkedin.com/in/sam-bricker-495393104/Tyler Papineau -https://www.linkedin.com/in/tyler-papineau-b95604204/Meridian Compensation Partners, LLC -https://www.linkedin.com/company/meridian-compensation-partners-llc/This episode is brought to you by Meridian Compensation Partners, LLC. Learn more by visiting MeridianCP.com. #Compensation #Wages #SPAC #Equity #ExecutiveCompensation #Clawback

On today’s episode, we’re joined by Matt Seto and Adam Hearn, both Principals at Meridian Compensation Partners, LLC. Matt and Adam explore the complexities of annual incentive plans, particularly how companies should navigate unforeseen circumstances that may necessitate adjustments to executive goals.Key Takeaways:(02:30) Common financial metrics used in annual incentive plans. (04:29 ) Differences between hardwired and discretionary adjustments in incentive plans. (05:58) Why making adjustments should be guided by business principles, not rules. (08:11) Guidelines for determining when adjustments are appropriate. (09:54) The impact of management decisions on incentive plans and compensation. (13:25) Importance of well-documented frameworks for executive committees. (16:25) How communication between management and the board influences adjustments. (19:42) The significance of external and internal perceptions when making adjustments.Resources Mentioned:Matt Seto - https://www.linkedin.com/in/mattseto/Adam Hearn - https://www.linkedin.com/in/adam-hearn-870b638/Meridian Compensation Partners, LLC - https://www.meridiancp.com/This episode is brought to you by Meridian Compensation Partners, LLC. Learn more by visiting MeridianCP.com. #Compensation #Wages #SPAC #Equity #ExecutiveCompensation #Clawback

On today’s episode, we’re joined by Partner, Jonathan Szabo, and Principal, Mike Meyer, both of Meridian Compensation Partners, LLC.Jonathan and Mike dive deep into the complexities of establishing meaningful goals for incentive plans. They share practical strategies for setting both short-term and long-term goals that align company performance with desired executive behaviors.Key Takeaways:(02:22) Compensation philosophy provides blueprints for decision-making.(04:02) Philosophical discussions around goal setting are crucial.(04:46) Involving members of the audit committee can enhance goal-setting.(07:17) Adjustments to incentive plans require consistent methodology.(07:37) Factors like internal budgets and historical performance impact goals.(12:01) Committees should consider economic predictability when setting goals.(17:20) Strategies for uncertain times include setting growth rate targets.(21:40) Approaches differ for short-term vs. long-term incentives.Resources Mentioned:Jonathan Szabo - https://www.linkedin.com/in/jonathan-szabo-13045493/Mike Meyer - https://www.linkedin.com/in/mike-meyer-626a6071/Meridian Compensation Partners, LLC - https://www.linkedin.com/company/meridian-compensation-partners-llc/This episode is brought to you by Meridian Compensation Partners, LLC. Learn more by visiting MeridianCP.com. #Compensation #Wages #SPAC #Equity #ExecutiveCompensation #Clawback

On today’s episode, we’re joined by Laura Hay, Partner at Meridian Compensation Partners, LLC. Laura explores the critical role of compensation in retaining executive talent, discussing the interplay of business conditions, compensation structures and the importance of strategic retention initiatives. She offers insights into identifying retention risks and structuring compensation to mitigate these risks effectively. Key Takeaways: (01:16) Change in management increases retention risks. (01:47) High executive turnover in healthcare and technology sectors. (03:16) Retention is not about keeping 100% of executives. (04:20) Lack of a good succession plan can be a retention destroyer. (05:20) Outdated compensation designs harm retention efforts. (08:11) Strategic direction and investment in people support retention. (12:15) Annual compensation programs should drive retention. (15:33) Special retention awards should be carefully structured and justified. (18:13) Proactive shareholder communication can mitigate criticism of retention awards. Resources Mentioned: Laura Hay - https://www.linkedin.com/in/laurahay/ Meridian Compensation Partners, LLC - https://www.linkedin.com/company/meridian-compensation-partners-llc/ This episode is brought to you by Meridian Compensation Partners, LLC. Learn more by visiting MeridianCP.com.   #Compensation #Wages #SPAC #Equity #ExecutiveCompensation #Clawback

On today’s episode, we’re joined by Darren Moskovitz, Partner at Meridian Compensation Partners, LLC. Darren dives into the critical aspects of executive compensation arrangements, especially focusing on the implications of executive departures, severance practices and the recent Federal Trade Commission (FTC) rulings on non-compete restrictions. Key Takeaways: (00:20) The importance of considering annual and long-term incentives during executive departures. (01:04) Overview of typical severance approaches: general severance vs. change-in-control severance. (03:35) Understanding the commercial and reputational reasons for severance plans. (06:00) Historical context and evolution of severance practices since the 1980s. (08:00) Differentiation between general severance and change-in-control severance benefits. (09:20) The impact of FTC’s new rulings on non-compete provisions. (13:19) Potential changes in executive compensation programs due to new FTC regulations. (20:30) Exploring the concept of garden leave as a potential alternative to non-compete agreements. (24:42) How non-solicitation and confidentiality agreements might be affected by FTC changes. (27:03) Immediate steps companies should consider in response to potential FTC regulations. Resources mentioned: Darren Moskovitz - https://www.linkedin.com/in/darren-moskovitz-00b42b/ Meridian Compensation Partners, LLC - https://www.meridiancp.com/ This episode is brought to you by Meridian Compensation Partners, LLC. Learn more by visiting MeridianCP.com.   #Compensation #Wages #SPAC #Equity #ExecutiveCompensation #Clawback

On today’s episode, we’re joined by Michael Brittian, Partner at Meridian Compensation Partners, LLC. Michael explores the nuanced world of special one-time equity awards, offering insights into when and why these can be pivotal for executive compensation strategies, especially during leadership transitions or significant company achievements. Key Takeaways: (01:33) Michael outlines the typical components of executive compensation packages. (05:11) Common scenarios where special compensation awards are beneficial. (07:06) The benefits of accomplishing goals using the existing compensation plan over instituting special equity awards. (09:39) Principles for designing effective and justified special awards. (11:58) The importance of aligning special awards with company goals and shareholder expectations. (16:28) Discussion on setting realistic and strategic performance goals for special awards. (19:54) Special awards should not be a replacement for solid compensation structure. Resources Mentioned: Michael Britton - https://www.linkedin.com/in/michael-brittian-4896201/ Meridian Compensation Partners, LLC - https://www.meridiancp.com/ This episode is brought to you by Meridian Compensation Partners, LLC. Learn more by visiting MeridianCP.com. #Compensation #Wages #SPAC #Equity #ExecutiveCompensation #Clawback

On today’s episode, we’re joined by Andrew McElheran, Partner at Meridian Compensation Partners, LLC. Andrew dives deep into the complexities of establishing resilient executive compensation frameworks amid the uncertainties of the global economic landscape. Key Takeaways: (01:33) Managing a corporation involves addressing classic business challenges and creating effective compensation arrangements in uncertain times. (02:19) Resilient compensation designs are those that stand the test of time and do not require frequent revisions. (03:46) A balance between market-aligned compensation plans and business objectives is crucial for resilient design. (05:00) Simplicity in compensation design can lead to resilience, but it must also align with other business goals like shareholder alignment. (06:07) The resilience of compensation plans can vary based on a company’s pay philosophy and its comfort with using discretion in performance assessment. (09:20) Incorporating flexibility and discretion in executive compensation plans can add resilience, reflecting the need to adapt to unpredictable circumstances. (11:21) Setting goals that balance ambition with achievable targets can enhance the resilience of compensation programs. (13:44) Testing the resilience of compensation frameworks can help ensure they are robust enough to withstand future challenges. This episode is brought to you by Meridian Compensation Partners, LLC. Learn more by visiting MeridianCP.com.   #Compensation #Wages #SPAC #Equity #ExecutiveCompensation #Clawback

On today’s episode, we’re joined by Jared Berman, Partner at Meridian Compensation Partners, LLC.  Jared discusses the nuances of executive compensation governance, including the appropriate roles of the compensation committee, management team and advisors in the oversight process. Key Takeaways: (01:27) Governance involves defining the roles of the compensation committee, management and advisors in overseeing executive pay. (02:28) Compensation committees typically meet four to five times annually. (03:54) Clearly defining the committee’s charter and scope is crucial to avoiding ambiguity over decision-making authority. (06:43) While management should drive incentive plan design aligned with business strategy, the board ultimately approves proposals in shareholders’ interests. (13:09) Since COVID, incorporating strategic and non-financial priorities in incentive plans has become a growing trend. (19:46) Advisors should share candid perspectives based on new information to foster thoughtful committee dialogue. Resources Mentioned: Jared Berman - https://www.linkedin.com/in/jared-berman-3950884/ Meridian Compensation Partners, LLC - https://www.linkedin.com/company/meridian-compensation-partners-llc/ This episode is brought to you by Meridian Compensation Partners, LLC. Learn more by visiting MeridianCP.com.   #Compensation #Wages #SPAC #Equity #ExecutiveCompensation #Clawback

On today’s episode, we’re joined by Jamie McGough, Partner at Meridian Compensation Partners, LLC. Jamie discusses strategies for evaluating the alignment between executive pay and company performance. Key Takeaways: (01:15) Total shareholder return is essential, plus profitability and other financial metrics relevant to the company. (05:30) Treatment of performance plans requires judgment when analyzing pay. (08:40) Overlapping cycles and grant timing complicate pay-performance analysis. No perfect solution exists. (13:02) The CEO is central to focus on. (17:41) Pay versus performance analysis is fundamentally a governance tool for committees. (20:22) SEC disclosure rules focus on individuals and accounting values rather than pay structures. Resources Mentioned: Jamie McGough - https://www.linkedin.com/in/jamie-mcgough-2007a9a/ Meridian Compensation Partners, LLC - https://www.meridiancp.com/ This episode is brought to you by Meridian Compensation Partners, LLC. Learn more by visiting MeridianCP.com.   #Compensation #Wages #SPAC #Equity #ExecutiveCompensation #Clawback