Incentives amidst COVID-19 pandemic
The economic unrest resulting from the COVID-19 pandemic exacerbated the risks related to variable and share-based compensation in a very highly volatile environment.
Most organizations with a year-end in the 4th quarter are asking how to evaluate performance for 2020 and how to set performance objectives for 2021.
Some organizations have already considered many different approaches which we have categorized in clusters by our experts, Hugue St-Jean, Consultant, Executive compensation and governance and Bridgit Courey, Partner and Senior consultant.
We also highlight the benefits and some potential pitfalls resulting from the various paths to dealing with incentive compensation in a highly volatile environment.
The challenge is balancing employee and investors’ expectations while ensuring that the company’s perennity and cash flow is protected all the while sustaining employee motivation and retention.
Recent surveys show that at this point, more than half of companies are considering some sort of adjustment with respect to their incentive plans.
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