Thought Capital

The decision of whether a performance metric should be used in the short-term incentive plan or long-term incentive plan may impact its efficacy and ability to motivate plan participants. This article outlines considerations in determining whether the selected ESG metrics may be more appropriate for the short-term or long-term incentive program. The preceding article of our series addressed the different considerations when selecting what ESG metrics could be included in a compensation program, and the following article will discuss key considerations when determining the weightings of the selected metrics. While the focus of this series is on ESG metrics, we note that many of these principles can be applied to other types of metrics that companies may wish to implement in their incentive programs.

Hugessen Consulting, a leading provider of advice to public and private boards on executive compensation, performance measurement and assessment, board effectiveness and related governance, is pleased to announce the promotion of Reanna Dorscher to the position of Partner. This promotion is a testament to Reanna Dorscher's exceptional skills, dedication, and valuable contributions to the firm's success.

Hugessen's June 6th webinar featured topics including: Board effectiveness and EDI insights; Learnings from ESG metrics in incentive programs; Shareholder perspectives; Anticipated trends going forward; and a US perspective from our affiliates at Semler Brossy Consulting Group.

As a Manager based in the Toronto office, Emily focuses on important moments in a company's growth, such as going public through IPOs or RTOs, and handling mergers and strategic reviews.  In these special situations, companies need to take a deep dive to figure out if their incentive programs are set up to achieve their goals.

In the latest edition of our “Insights in Action” video series, Emily talks about the vital role of tailored approaches in guiding compensation decisions and fostering collaboration with clients. She emphasizes the significance of understanding unique business needs and principles as the foundation for crafting creative solutions, particularly in complex situations. Emily highlights the value of early and open communication and the strategic use of guiding principles to achieve alignment and facilitate effective decision-making.

Ken founded Hugessen Consulting in 2006 to meet the growing demand from boards for direct access to independent advice on executive compensation and related performance and governance matters.

In the latest edition of our 'Insights in Action' video series, Ken talks about the fundamental factors contributing to the firm's success. He highlights the unwavering belief in the quality of their team and the diligent processes in selecting and developing individuals. This belief has led to the formation of a team he considers as exceptional contributors. Ken also delves into the critical role of fostering strong client relationships, emphasizing the firm's commitment to excellence and innovation. He shares insights on the evolving role of boards in enhancing their performance and navigating shareholder expectations. Ken's perspective underscores the significance of accountability, particularly in the context of say on pay and majority voting mechanisms, and acknowledges the essential role of the people who have chosen to be a part of the firm's journey.

Determining an Executive Chair’s compensation can be a relatively complex exercise. To assist Boards in making informed decisions, we have outlined key considerations in this article.

The abrupt and complete collapse of SVB provides a potent case with which to examine the utility of the various components of executive pay disclosure. This article aims to help readers reconcile these vastly different truths. Although the SCT and PVP disclosure seem to contradict, they are in fact complimentary pieces of information that provide stakeholders with a valuable perspective on the company’s approach to executive pay.

ESG metrics are a valuable tool to align executive interests with company goals and corporate governance expectations. It is important to carefully select ESG metrics and structure the compensation packages such that they are implemented in a meaningful and impactful way. This article outlines considerations for selecting ESG metrics for inclusion in a compensation program, and walks through an illustrative example.

Earlier articles in our series outlined the rationale for including ESG in executive compensation and introduced a framework to guide companies in identifying where they are in their ESG journey. Our next article will examine whether a company’s selected ESG metric(s) should be incorporated in the short or long term incentive program.

Larry Fink’s annual Letter to CEOs has become an anticipated dispatch that sets the tone for the upcoming proxy season, and this year’s edition is no exception. This article provides a summary of themes from the 2023 letter and our key takeways for consideration.

In this article, we introduce one framework that companies can use to identify where they are in their ESG journey and areas for improvement. This assessment can then inform the development of robust, meaningful ESG measures in compensation.