Building Resiliency into Executive Compensation Programs

We recently had a terrific conversation on executive compensation with Blair Jones, Managing Director of Semler Brossy; John Roe, Managing Director and Head of Investment Stewardship (Americas), BlackRock; and Dan Bird, Director, Executive Compensation, Boston Scientific.

As we talked about 2023 executive compensation, the main theme that emerged was resiliency. Here are a few insights:

• A lot of companies have backed themselves into a “pay for performance” corner. As you can see from the chart below, base salaries as a percentage of total CEO compensation have continued to decline. (There is a similar decline in other NEO compensation.) That means more compensation is at risk each year. Beyond that, companies have set relatively narrow payout ranges around performance goals in their annual bonus and long-term p