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“As compensation consultants, we—and our clients—typically look at executive pay is to ensure that we are paying competitively for the CEO position to ensure that the organization is meeting its business goals and thereby driving shareholder value creation,” said Ed Steinhoff, a managing director with Pearl Meyer.
In effect from this employee location shift, employers were surveyed to assess whether compensation would be adjusted. According to Pearl Meyer’s report, 4.3 percent of companies surveyed said they would reduce employee cash compensation if they moved to a lower-cost geographic area, while 56.5 percent said they would not.
“Compensation strategies are facing greater scrutiny, not only as a social issue (the S in ESG) but also as companies struggle with a labor shortage. In a 2021 Pearl Meyer survey, nearly half of respondents (47%) had experienced higher than usual employee turnover,” Corporate Compliance Insights reported.
“Human capital is essential for companies to execute their strategies and if they have shortages or an underqualified workforce, it creates risk for them,” said Bill Dixon, managing director.
“CEOs who don’t receive annual equity awards are still likely to feel the hit when share prices plummet, since many of those executives already own shares issued through up-front grants that are meant to last many years,” said Aalap Shah, managing director, Pearl Meyer.