Case Study: Incorporating ESG Metrics into Executive Compensation

Michelle Tan, Emily Parsons, Julia Hunt  | November 2020

Discussions on environmental, social, and governance ("ESG") topics are not new to companies in the energy sector. In December 2018, Royal Dutch Shell PLC ("Shell"), the British-Dutch oil and gas company, went a step beyond health and safety compliance when it announced it would incorporate carbon reduction metrics into its executive incentive plan.

This article examines the process Shell undertook in implementing these metrics, and the role shareholders played throughout.

The Director's Toolkit Tally Sheets

Richard Liu  | November 2020

As we approach the conclusion of calendar 2020, Board decision-making on executive compensation becomes top-of-mind. Hugessen’s latest article shows how the use of Tally Sheets can unveil the true value of executive compensation, and support directors in making well-informed decisions on executive pay.

ISS COVID-19 Compensation Policies FAQ

Michelle Tan, Richard Liu  | October 2020

ISS recently released its FAQ on the impact of COVID-19 on compensation plans, and provides forthcoming advice to issuers dealing with the economic ramifications of the pandemic. While the latest guidance suggests the possibility of ISS providing relief to issuers making certain adjustments to the compensation plan, the expectation for more fulsome disclosure of rationale is reinforced.

PERFORMANCE EVALUATION FOR 2020: WHERE TO START?

As we approach year-end meetings, Boards and Compensation Committees are preparing for potentially challenging discussions related to corporate and individual performance for the year, and how this performance is valued in incentive plan outcomes.

This article provides a framework for Boards to think through the year’s performance results and whether it is appropriately reflected in year-end pay outcomes.

COVID-19 Director Pulse Survey

Hugessen  | September 2020

Hugessen Consulting recently conducted a Summer 2020 COVID-19 Director Pulse Survey to gather director views and corporate actions related to executive incentives amidst the COVID-19 pandemic.

Please click here to view the results.  

Are You Paying for Competitive Performance?

Companies spend a considerable amount of time making sure target bonuses are competitive. However, there are situations where incentive plan participants are rewarded competitive pay, but for uncompetitive performance. This briefing highlights how boards and management teams can consider taking the same approach as private equity firms to close performance gaps

Integrating ESG considerations into Executive Compensation Governance

The shareholder community has turned its attention to “ESG” (Environment, Social and Governance).  While the Governance component has been effectively addressed by Canadian boards, the topic of “E&S” or more broadly “Sustainability” is growing in importance within boardrooms. Read our latest article which aims to provide directors with a practical guide to developing and enhancing a more robust approach for integrating E&S considerations into company strategy, board structure and oversight, and executive compensation programs.

Highlights from the 2020 Proxy Season

Brian Lees, Kevin Zhu  | June 2020

Hugessen has completed its annual review of the 2020 TSX60 proxy circulars, and we are pleased to share key findings on pay levels, pay design, regulatory updates, Say-on-Pay results and trends in the shareholder community. This year’s review has provided specific thoughts and considerations as companies and boards navigate the uncertainty of a pandemic environment. Please click here for the recording or download the TSX60 briefing/slides.

Treading Water - The Responsible Use of Stock Option Exchange Programs

John Skinner, Michael Small  | May 2020
The recent downward trend in equity values is presenting challenges for boards from both a talent retention and an equity usage perspective. This briefing discusses the concept of a “value-for-value” stock option exchange as a potential response, including practical considerations around applicability and various legal, tax, and accounting implications.

Executive Compensation in Unprecedented Times

We are living in challenging and unprecedented times. As circumstances continue to evolve, we encourage caution against making any significant changes to compensation approaches or decisions at this time. This briefing provides the implications, as we see them, on executive compensation, and practical approaches for compensation committees.