What impact might COVID-19 have on executive pay?

Short-term, several FTSE companies have already cut pay, waived annual incentives and suspended share grants to conserve cash and empathise with shareholders and their wider workforce. With many policy votes anticipated this AGM season, Remuneration Committees will be evaluating whether to proceed, make last-minute amendments or defer the pay resolution.

Longer-term, the crisis is likely to provoke an acceleration of reform in plan design and practices to reflect societal expectations, boards seeking to mitigate reputational risk and practical factors such as the business strategy post COVID-19. Greater adoption of ESG incentive measures, a reduction in quantum, and more rapid adoption of simplified pay models may be anticipated (such as referenced in the research study I conducted last year for the Purposeful Company http://bit.ly/2olQA8n).