November 16, 2018

NACD Directorship – Repartee: Gauging the New Normal of Total ‘Stakeholder’ Return

A conversation between John Trentacoste and Phyllis J. Campbell facilitated and edited by Judy Warner

On the fourth day of the 2018 NACD Global Board Leaders’ Summit, a deeply experienced director joined with what some of our NACD members might describe as a rising rock star of a compensation consultant. I listened in as they talked about some of the emerging issues in executive pay. Phyllis J. Campbell, vice chair of the Pacific Northwest division of JPMorgan Chase & Co., serves on the board of Alaska Air Group and on the advisory board for diversity at Toyota North America. She also serves on NACD’s Advisory Council for nominating and governance committee chairs and was a member of the 2016 NACD Blue Ribbon Commission on Building the Strategic-Asset Board. John V. Trentacoste is a partner and chief operating officer of Farient Advisors, an executive compensation, performance, and global governance advisory firm based in Los Angeles and New York. Among the issues Campbell and Trentacoste discussed were how deep into an organization compensation plans should go; the shifting balance of compensation and equity as competition to recruit and retain talent becomes more acute; the changing mindset of boards toward their own composition; and how to plan for emerging C-suite roles such as a chief data officer. Highlights from their hour-long conversation follow.

Campbell: As a board, we’re sometimes wired to look in the rearview mirror and say, well, what we did yesterday has brought us this success today. But we know that’s not necessarily what’s going to bring us success tomorrow. The question I would raise to a comp consultant is, What role do we have as a board to engineer the company for growth and transformation? Is this a new area for comp consultants?

Trentacoste: What we see more of is digging deeper into the organization from a philosophical level to understand how incentives cascade. What are the metrics? What have been the outcomes, and are they aligned with what we’re trying to create as an organization from a cultural perspective?

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