The Director's Toolkit Tally Sheets

November 2020

The ongoing COVID-19 pandemic has inflicted unprecedented disruptions across many businesses and industries. As we enter Q4 2020, many Boards are in the throes of planning for executive compensation decisions in respect of this “COVID year,” with many grasping for precedent-setting examples and well-articulated principles to support a reasonable position. Even in industries where the business impact of the pandemic has been relatively modest (or positive), there remains significant pressure and scrutiny from stakeholders, and a looming sense of uncertainty about what the future might bring. For all, when faced with difficult decisions, the need for relevant and timely information is greater than ever.

When Boards encounter high-pressure situations, the stress is often compounded by information gaps. Whether the company is in the midst of approving a major pay decision, undergoing a CEO succession, or anticipating a possible change-of-control, having a fulsome understanding of the compensation dynamics at play helps ensure directors make an informed decision. Often is the case where the Board finds itself asking questions it should already have the answers to, and in many cases, the questions can be multi-layered – for example:

Question and Question Behind the Question

Tally Sheets: Unveiling the True Value of Executive Compensation

As the name suggests, Tally Sheets “tally up” the various components of compensation and benefits and provide a comprehensive view of the economics at play in the compensation program. Tally Sheets allow directors to understand how the components of executive pay work together. This information should be reviewed to support the Board’s decision-making on critical decisions regarding executive compensation. For example, when contemplating a base salary increase, while the decision in and of itself may seem reasonable and not excessive, the Board should consider the resulting impact to the employee’s pension benefits and termination entitlements, which are often tied to base salary.

Tally Sheet Example


As we approach the conclusion of calendar 2020, Board decision-making on executive compensation becomes top-of-mind. For some, the impact of COVID-19 on the compensation program compounds an already strenuous year-end process. Tally Sheets serve as an important tool for Compensation Committees when making critical decisions on executive compensation. We invite you to reach out to a Hugessen consultant for further information, or for support with addressing the unique circumstances of your organization.

Richard Liu


(416) 847-3292

Hugessen Consulting is an independent consulting firm dedicated to meeting the executive and director compensation consulting requirements of Boards. With offices in Toronto, Calgary, and Montreal, the firm’s mission is to be the leading provider of advice on executive compensation, director compensation, performance measurement and assessment, and related governance to the Compensation Committees of companies in Canada and the U.S.

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