Total Rewards Briefs

At the outset of the pandemic, employees were the top priority of boards, second only to continued liquidity. That focus intensified during the social unrest following the death of George Floyd. Now, the SEC’s new disclosure rules on human capital management (HCM) could further reinforce the focus on workers — at least temporarily.

Recent developments concerning corporate sustainability suggest that compensation committees of public company boards of directors, as well as human resources executives, should consider the use of metrics developed to measure sustainability in incentive compensation plans.

Care should be taken to avoid enrichment of executive pay packages as a result of a stock buyback. The selection of performance measures and corresponding performance levels can be one of the most difficult aspects of designing an incentive compensation program for executives.

Recent settlements in two cases appear to have been heavily influenced by the Investors Bancorp decision in ways that do not bode well for directors who determine their own compensation under shareholder-approved plans that do not limit their discretion to amounts that would not make it worthwhile for the plaintiffs’ lawyers to sue, or could be protected by the business judgment rule.

A recent decision by the Delaware Supreme Court raises a question as to whether a plan limit allowing board discretion to grant awards within general parameters will be sufficient to ensure business judgment deference, rather than an entire fairness review.

Of the nearly 24 million U.S. children under the age of six, 15 million kids have parents who are participating in the labor force. This begs the question: Do working parents have access to affordable, high-quality child care?