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.
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 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.
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.
2020 has been an extraordinary year that has caused significant disruption within companies. Corporate performance, the rise of “S” in ESG, board judgement related to incentives and equity issuance, and more, look different than at the start of the year. As year-end approaches, Boards and Management must address these specific challenges to take tangible action. Hugessen and the Institute of Corporate Directors invite you to a one-hour webinar where we will explore how Committees should react to challenges and topics that have gained prevalence over the past year.
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.
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
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.
With the 2020 proxy season nearly at a close, HR and compensation committees are in the process of gathering information and trends for the coming year. While looking back at the previous year’s trends is always important, assessing the impact of COVID-19 and the evolving business environment on future executive pay decisions will be paramount.
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.
