05 Jun The Road Not Taken in Compensation Planning
By Paul McConnell and Mark Gressle
In supporting a company’s strategy, the board must adopt compensation programs that are aligned with the strategy and allow managers to participate meaningfully in the value they create for shareholders. Consequently, Boards and managers must explain to institutional investors and their proxy advisers how they intend the strategy to create value and how they will share with executive management in the value created. We believe this will frequently require operating outside of proxy advisor “guidelines” and outside of their zero-sum thinking.