June

ESG, Covid-19, Diversity, and Compensation and Governance Strategy

Dear Friend,

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As protests against racism and exclusion gain global visibility, boards are facing new challenges around performance metrics for diversity and inclusion, and how to factor human capital management into executive compensation and corporate governance. Meanwhile, the Covid-19 crisis continues to have an uneven impact across industries, causing negatively affected sectors to rethink their approach to the market, employees and customers.

This has all led to continued concern over ESG issues among boards, managers and investors – from climate change to the overarching human capital arena, encompassing pay disparity, diversity and other issues.

In this month's newsletter, we'll take a look at recent developments around diversity and inclusion, Covid-19, and the impact on compensation and governance.

Sincerely,
Robin Ferracone

Hot Off the Press From Farient

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ESG by Default: A Game Changer for Strategy, Governance and Remuneration

A combination of regulatory and investor pressure around ESG is re-shaping compensation and governance strategy at financial services companies, according to this report from Farient’s Swiss partner in the Global Governance and Executive Compensation Group (GECN), HCM International, Ltd. This report contains in depth research across multiple industries, as well as “4 Action Points for Decision Makers” on ESG strategy.

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Coronavirus Crisis Dents Salaries, Not Stock Awards, for Many CEOs

With hundreds of companies cutting CEO salaries this year as they struggle with the fallout of the Covid-19 crisis, they are reversing what seemed until recently a relentless trend of rising base pay. In this Wall Street Journal article, I explain how in 2020 the question is no longer how much to increase pay but when – and if – the old compensation will be restored.

Related Stories About ESG, COVID-19, and Comp & Gov Strategy

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Uber Sets Diversity Goals, Ties Executive Compensation to D&I Success

Many corporations have voiced a commitment to diversity and racial equity in recent weeks. But some are going further: tying executive compensation to reaching concrete diversity goals. This HR Dive article discusses such efforts at Uber, and boards and executives at other companies should pay attention as public and investor pressure mounts over diversity and inclusion.

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How Covid-19 Can Shape Boards' Thinking on ESG

Although the Covid-19 crisis has forced boards to look at the most immediate challenges – such as broken supply chains and transitioning to remote work – they should also be thinking about long-term ESG issues, says NASDAQ’s Director of Board Engagement in an article for Corporate Secretary. The ongoing upheavals will only enhance investor pressure, and boards need to be ready.

Events

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Leading Minds of Compensation - July 14, 2020

Farient will be participating in NACD’s Leading Minds of Compensation, virtual panel discussion and Q&A. This program provides insight into how executive compensation consultants like Farient and a select group of our competitors are working with compensation committees and management to address numerous challenges around compensation and human capital management this year.

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World at Work - Environmental, Social, Governance (ESG) Trends, Covid019 and their impact on Executive Compensation - July 21, 2020

With Covid-19 disrupting the global economy, the question is how this may shape ESG going forward. One thing is clear: company disclosures will become even more important. This World at Work, Expert Insights session, which I will be leading with my Global Governance and Executive Compensation Group (GECN) Colleague, Gabe Shawn Varges, addresses these issues within the context of the current environment. This program is limited to a small number of attendees.

Meet Robin Ferracone

Robin is our Founder and Chief Executive Officer. She is the author of the book entitled, “Fair Pay Fair Play: Aligning Executive Performance and Pay” and is a frequent presenter for well-known organizations including Council of Institutional Investors, Society for Corporate Secretaries and Governance Professionals, the National Association of Corporate Directors (NACD), and The Conference Board, among others. Robin has written extensively on the topics of performance management, incentive plan design, goal setting, and corporate governance. She has been quoted by several business and industry publications including, The New York Times, The Wall Street Journal, and The Washington Post. Learn more about Robin.

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Farient Advisors LLC is an independent executive compensation, performance, and corporate governance consultancy. Farient provides a comprehensive array of services to boards of directors and management including: compensation program design, goal setting and performance measurement, pay and performance alignment, board of directors compensation, and shareholder communication among others. Farient has offices in Los Angeles and New York and covers clients in more than 30 countries through our partnership in the Global Governance Executive Compensation Group (GECN).

New York: 55 E. 59th Street Suite 12B New York NY 


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