PLAY RECORDING

Broadcast Date: Wednesday, May 11, 2022
from 12:00 pm to 1:00 pm (ET)

Overview:

The evolving business environment and the economic fluctuations prompted by the ongoing COVID-19 pandemic continue to affect the implementation and design of executive compensation. In its recent move to tighten regulations, the U.S. Securities and Exchange Commission (SEC) released Staff Accounting Bulletin No. 120 which underscores a new and more aggressive focus on executive compensation issues.

The tight labor market and the rise in employee wages which are likely to persist in the coming months highlight the need to adopt new strategies to get ahead of the competition. Thus, companies are now taking steps to monitor potential changes to their current incentive plan policies.

This course offers an overview of the latest trends and best practices concerning executive compensation. Experienced executive compensation professionals Ken Foulks (ClearBridge Compensation Group) and Richard Liu (Hugessen Consulting) will provide the audience with practical strategies and tips to mitigate issues.

Some of the major topics that will be covered in this course are:

  • Regulation Updates
  • Incentive Design Trends
  • Best Strategies to Mitigate Issues
  • What’s on the Horizon

Credit:

Course Level:

Intermediate

 

Advance Preparation:

Print and review course materials

 

Method of Presentation:

On-demand Webcast (CLE)

 

Prerequisite:

General knowledge of executive compensation

 

Course Code:

149879

 

NY Category of CLE Credit:

Areas of Professional Practice

 

Total Credit:

1.0 CLE

Speaker Panel:

Ken Foulks, Senior Associate
ClearBridge Compensation Group

Ken Foulks is a Senior Associate at ClearBridge Compensation Group. He has six years of experience advising clients across numerous industries in support of business priorities and long-term shareholder value creation. Mr. Foulks focuses on all aspects of executive compensation including pay levels, performance measurement, and incentive plan design. Mr. Foulks has significant experience providing project management and analytical support for executive compensation reviews of companies in a wide variety of industries.

Mr. Foulks holds a Bachelor of Science in Business Administration from the Gabelli School of Business at Fordham University.

Richard Liu, Manager
Hugessen Consulting

Richard is a manager at Hugessen’s Toronto office. He is an experienced executive compensation consultant and advises Boards and Compensation Committees on matters including incentive plan design, pay level setting, and governance-related issues. Richard is adept in understanding the core business strategy, operations, and stakeholders of his clients and develops thoughtful solutions driven by in-depth analysis. He is also experienced in advising companies in special situations such as M&A, CEO succession, and strategic turnaround. Richard currently supports a wide range of publicly traded issuers and private companies in financial services, industrials, energy, utilities, real estate, and consumer goods. Prior to joining Hugessen, Richard’s experience included building financial models and performing business analytics for a global human resource consulting company.

Agenda:

Ken Foulks, Senior Associate

ClearBridge Compensation Group

and

Richard Liu, Manager

Hugessen Consulting

    1. Designing compensation programs in an uncertain world:
      • Given the seemingly unprecedented macroeconomic factors and turbulence affecting the business community at-large (e.g., COVID-19, supply chain issues, inflation, geopolitical events), Comp Committees are re-assessing their compensation philosophies and incentive plan designs to ensure it continues to meet the company’s (potentially competing) business and compensation objectives (e.g., attracting and retaining talent, maintaining alignment between pay and performance)
      • The application of Board discretion to adjust formulaic incentive outcomes is rising. Many companies have, whether formally or informally, adopted a framework that allows for the use of judgment and discretion to be applied to the corporate scorecard to arrive at the "right" incentive plan outcome
      • Significant stock price volatility can present challenges for managing equity grants and equity compensation plans, such as determining the number of shares to grant, desired value to deliver to executives, and setting TSR performance goals. There are various tools Comp Committees can consider to managing these plans during a volatile market
    2. War for talent and pressures on compensation
      • In context of the “war for talent”, companies are in need of ensuring pay is competitive. From an incentive design standpoint, this includes assessing the degree of leverage in the incentive plan – i.e., ensuring appropriate pay opportunity for delivering on key performance objectives. In addition, pay should serve as a tool to encourage employee retention
    3. ESG and impact on incentive design
      • As emphasis on Environmental, Social, and Governance (ESG) factors is increasing, and many companies have or are considering adopting ESG-related objectives in the executive compensation program in order to align with their evolving business strategy. The prevalence of ESG metrics in the short-term and long-term incentive plans is increasing, and companies are in need of assessing and calibrating ESG metrics in their incentive compensation
      • There’s also been an increase in shareholders using proxy proposals as a tool to advance ESG-related initiatives, including proposals on disclosing pay equity, etc. In addition, shareholders and shareholder advisory firms are starting to scrutinize the use of ESG metrics in incentive plans more closely (e.g., not just a “check the box”, but rather need to demonstrate rigor on any goals, rationale for metric(s), and impact of performance on payouts)
    4. Increase in use of “front-loaded” or “mega” equity grants:
      • There’s been an increase in recent years in the broad market in the use of large, one-time mega equity grants to hyper-focus CEOs and executive teams on long-term business and shareholder value creation objectives. Inn designing such high risk/reward compensation programs, companies need to consider all internal and external perspectives and be aware of potential design pitfalls

Date & Time:

Wednesday, May 11, 2022

12:00 pm to 1:00 pm (ET)

Materials:

Download Course Materials

Who Should Attend:

  • Employee Benefits Consultants and Lawyers
  • Labor and Employment Lawyers
  • Human Resource Executives
  • Human Resource Managers
  • Human Resource Directors
  • Vice Presidents and Directors – Executive Compensation, Compensation, and Benefits

SPEAKERS

Ken FoulksSenior Associate
ClearBridge Compensation Group
Richard LiuManager
Hugessen Consulting

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