THE NEW RULES FOR BOARD COMPENSATION COMMITTEES
While the world’s corporate boards face regular criticism for oversight failures, the coming 2019 proxy season will bring the most targeted investor ire over a perennial complaint — how boards set CEO and top exec compensation.
The January issue of online monthly Boardroom INSIDER offers a special section on how board compensation committees are evolving to meet new paysetting demands. “No other board committee has had to deal with such a flood of change and tougher public scrutiny,” says BI publisher and governance speaker Ralph Ward. “In the U.S., Say On Pay votes and CEO/median employee pay ratios are the biggest comp committee headaches.”
Among the shifts board comp committees are making to keep up with the new exec pay climate:
— More (and longer) committee meetings, and smarter work planning. “Comp committees that met four times a year now meet five or six times,” Ward observes. The complex paysetting process is also being spread out over more of the meetings to give added time for research and board debate.
— Chairing the board comp committee has become far more demanding. More technical and administrative skill is needed now, so boards are keeping chairs with these talents in place longer. Committee chairs today also need skill in communicating with shareholders and analysts on why the CEO’s pay plan really works.
— Comp committees are taking on new roles in assuring corporate talent development and succession plans (especially for the CEO slot). Ward notes that more committees are adding “Leadership” or “Management Development” to their titles and mandates.
Other articles in the January issue include:
Wanted – Research on board best practices.
A manifesto for board pre-meeting “homework.”
Audiobook edition of Ralph Ward’s Board Seeker Guidebook now available.
Q&A: How do we handle boardroom visitors?
NOW ON AUDIOBOOK.
— Here’s why you have more “board experience” than you think (and why your current resume hides it).
— How women can jump the career obstacles they face into the boardroom.
— Finding your board search mentors and networks.
— How board searches really work (and how to turn flaws in the process to your advantage).
— Gaining the attention of board contacts and search firms.
— Prepping for a board interview… and for your first board meeting.