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The CD&A for 2020 is likely to be more complex than usual. Boards can get ahead by documenting decisions, demonstrating responsiveness, and drafting early.
“The new [C&DI] doesn’t change anything; for me it complicated matters," said Deborah Lifshey, managing director of Pearl Meyer. "These examples might not be relevant now or months from now. There are gray areas surrounding a lot of these perquisite questions."
“While the full board is active in these conversations about work from home, compensation committees that have expanded charters focused on human capital, along with compensation, have their hands in deeper,” said Melissa Means, a managing director in Pearl Meyer’s Boston office.
“There has to be some sense of equity. If there were a lot of furloughs and the organization isn’t hiring people back now, it is awfully tough to offer discretionary awards,” said Steve Sullivan, managing director, Pearl Meyer.
“Generally, executives [in healthcare] seem to be sharing more of the burden via pay cuts than in past recessions,” said Ed Steinhoff, managing director, Pearl Meyer.
“I’m not sure there’s a formula [for cutting executive pay] that says, ‘If we do this, then we can keep X employees, but I think it is more of an internal solidarity and fairness issue about how you’re treating all levels of the organization,” said Beth Florin, a managing director at Pearl Meyer.