Agenda: Time to Update Plans?
September 8, 2020
The pandemic has left companies with an array of business challenges to contend with, and compensation committees continue to discuss how to keep executive pay practices competitive while addressing issues impacting the greater workforce.
With compensation committees working to adjust incentive plan time horizons, metrics and other elements, sources say this provides boards an opportunity to consider redesigning plans to include ESG elements — particularly those that have become increasingly material during the Covid-19 crisis, such as health and safety, and those that have grown more salient in light of the calls for racial equity that have exploded across the country this year, such as diversity.
R.J. Bannister, partner and chief operating officer (COO) at Farient Partners, says that although companies in some industries had to simplify plans and programs to be more conservative in terms of payouts due to the pandemic, “a lot of companies are at least going to review where the ESG — and broader stakeholder — issue fits within overall performance metrics systems.”
Bannister predicts the pandemic will drive compensation committees to consider whether to measure customer retention strategies as well as investments in suppliers and communities as performance goals in incentive plans.
by Lindsay Frost
About Richard Bannister
Partner, COO, Farient Advisors/GECN Group, New York
R.J. has 30-plus years of experience consulting to the S&P 1500 and large private companies representing the board’s compensation committee or management, and sometimes both parties. R.J. has worked with hundreds of companies on their total rewards strategy and executive compensation philosophy to align pay programs with business strategy.
His ability to create alignment results from deep insights on industry and compensation trends; sophisticated financial, market, and compensation analytics; and impactful, easy-to-implement solutions. He has worked in nearly every industry sector and extensively with private equity companies. Before joining Farient, R.J. was the founder and CEO of Bannister Group LLC, an executive compensation and total rewards consultancy he founded in 2019 after retiring as a managing director from Willis Towers Watson.
R.J. holds an MSc in economics from the London School of Economics and a BS in economics from the University of Pennsylvania’s Wharton School with a triple concentration in corporate finance, strategic management, and international political science.