Setting performance goals for incentive compensation is always a challenge and never more so in the COVID economy, with workforce and supply chain disruptions, as well as the broadening definitions of performance that increasingly include environmental, social, and governance issues.
It is still important to understand the “orthodox” inputs to financial goal-setting (long-range plans, the cost of capital, historical and expected performance, peer performance, etc.). But they are no longer enough.
Our new business environment requires at least some qualitative evaluation and the exercise of judgment. It also prompts us to ensure plan design does not exacerbate goal-setting difficulties. In this webcast with Pearl Meyer and the NACD, we discuss how to balance an ever-evolving goal-setting and performance assessment landscape and do so while remaining firmly rooted in the fundamentals of good business management.
