Cash Compensation Changes in Light of the Current Economic Crisis

Journal of Compensation and Benefits, Jul/Aug, pp. 5-13 (2020)

9 Pages Posted: 4 Nov 2020

See all articles by James Reda

James Reda

Arthur J. Gallagher & Co. Human Resources Consulting - New York Office

Date Written: June 1, 2020

Abstract

This article focuses on cash compensation, which includes base salaries and annual bonuses (also referred to as “short-term incentives”). As of the outset of this current economic crisis (early April 2020), the state of change is as follows: Many companies have already begun reducing base salaries—particularly at the executive level and in some cases extending to outside directors and even the broadbased employee population; and, while the vast majority of companies (especially those with a calendar year end) have not yet made any changes to their short-term incentive plans that were put in place prior to mid-March, boards are likely to begin announcing plans to materially change the performance metrics, goals (or targets) and corresponding payout schedules used in these plans.

Keywords: Executive Compensation, Incentive, CEO

JEL Classification: G,J,L

Suggested Citation

Reda, James, Cash Compensation Changes in Light of the Current Economic Crisis (June 1, 2020). Journal of Compensation and Benefits, Jul/Aug, pp. 5-13 (2020), Available at SSRN: https://ssrn.com/abstract=3690679

James Reda (Contact Author)

Arthur J. Gallagher & Co. Human Resources Consulting - New York Office ( email )

NY
United States

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