CII 2019 Spring Meeting – Pay Pioneers
April 8, 2019
John Trentacoste, partner and COO at Farient Advisors, moderated a discussion with representatives from two companies that are bucking the standard approach to pay and an investor that advocates for simpler, more long-term-oriented compensation. Christine Poon, chair of the compensation committee at Regeneron Pharmaceuticals, explained how her company grants stock options to all of its employees. She said this approach has created an ownership culture, fostered innovation, boosted productivity and retained scientific talent. Darian Rich, human resources executive for Barrick Gold, said his company requires its executives to hold their shares for the duration of their employment with the company. The CEO must hold three times his base salary in shares and other executives must hold five times their base salaries. “Being shareowners helps them drive the long-term viability of the enterprise and provides everyone with more connectivity to the decisions being made,” said Rich.
Timothy Youmans, a director at Hermes EOS, said pay in the United States and the Americas is way too high. “There has been an experiment to align pay with performance and it hasn’t worked,” he asserted. Youmans said a new system has to be created that is aligned with long-term strategy and incorporates simplicity, shareholding, accountability and stewardship. He also emphasized the need for pay plans that offer compensation committees the discretion to adjust CEOs’ pay downward as well as upward.
CII Spring Meeting
More than 530 CII members attended CII’s March 4-6 spring conference in Washington, D.C., which featured discussion topics ranging from the promise of blockchain technology to investor perspectives on the #MeToo movement.