COVID-19's Impact on Incentive Plans

Meridian Compensation Partners, LLC

COVID-19 has altered fundamental priorities for the year and significantly affected many companies’ ability to achieve the annual incentive plan and/or performance-contingent long-term incentive plan goals that were set prior to current circumstances.

Topics for the Briefing

Market Practice Update

• Reductions to executive salaries and director fees, and other compensation actions being taken (as well as actions not expected to be taken)
• Proxy advisor views on COVID-19 related pay actions

2020 Annual Incentive Plans

• Framework for annual incentive plan decision making
• Potential adjustments to annual incentive plans
• Applying principles for adjustments and exercising discretion in assessing 2020 annual incentive payouts

In-Flight Long-Term Incentive Plans

• Addressing outstanding awards / modifying performance-based awards
• Accounting and disclosure implications
• Applying principles for adjustments and exercising discretion on long-term incentive payouts

COVID-19 Impact on 2021 Short- and Long-Term Incentive Plans

• Design considerations and target setting for short-term incentives
• Design considerations, vehicle mix, and target setting for long-term incentives

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