Proxy season is here — and change is in the air. Our latest Bank Compensation Corner highlights timely disclosure considerations, new federal scrutiny of proxy advisors, and what recent research says about the effectiveness of PSUs.

This month, we’re diving into evolving leadership expectations, CEO pay growth, and how director compensation may influence risk in the boardroom. Each article offers critical insight into the changing dynamics of governance and pay practices, essential reading for compensation committees, HR leaders, and executive teams.

This month, we’re focused on how volatility, equity design, and pay transparency shape the compensation landscape. With growing stakeholder scrutiny and economic uncertainty, these themes are top of mind for compensation committees across the banking sector.

During 2023 and early 2024, we engaged in numerous discussions with our clients regarding incentive plans. Many were concerned that these plans would not pay out at targeted levels. A significant factor in this concern was the performance of banks; many failed to meet their budget targets.

A decade ago, we were in the middle of an economic downturn, and the world of executive compensation was under intense scrutiny. One target for that scrutiny was executive benefits and perquisites. Things like excessive change-in-control payouts with “gross-ups” and perquisites like vehicle allowances and country club memberships were placed under the microscope.