November 2, 2020
Agenda: What a Biden Win Means for Comp Committees
by Stephanie Forshee
As if boards weren’t dealing with enough transformation in 2020, the looming presidential election could potentially mean significant changes for compensation committees.
Robin Ferracone, founder and CEO of compensation consultancy Farient Advisors, agrees that a Biden administration would certainly equate to changes in the tax code.
“The government has tried to use the tax code to quell increases in executive compensation, but it’s never really worked,” she says. “But I think we may see a re-emergence of that.”
In some municipalities such as Portland, Ore., and California, lawmakers have begun to tax companies based on their CEO pay ratio, which compares the top exec’s pay to the median worker. Ferracone predicts that under a Biden administration or under a Democratic-majority Congress, corporations could face more taxes of this nature.
She’s also predicting an increase in reporting requirements on ESG measures.
“Right now, that’s not legislated, it’s left to companies on a case-by-case basis, deciding how they want to report that, but I have a feeling we may get more reporting requirements,” she says.