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Strategies for Adjusting Executive Performance Goals in the COVID-19 Era

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The COVID-19 pandemic continues to inflict economic costs on companies across sectors of the economy. For affected companies with compensation programs that are significantly performance-based, motivating and retaining executive talent when incentive performance targets become unattainable due to the downturn is a significant concern. The heightened level of uncertainty over how long the pandemic will last and how fast the economy can recover further obscures the way forward. In this advisory, we summarize recent proxy advisor guidance on adjusting annual performance goals, and outline a range of strategies for adjusting those goals to incentivize performance and retention while maintaining alignment with shareholder return and fundamental financial performance.

Read the full National Law Review article here.