Streamlining Compensation Decisions with a Mid-Year Summit

An in-person strategy session can align management, the Board, and the Board’s advisors on compensation decisions.

 

An in-person full-day compensation strategy summit builds alignment and trust between management and the Board on executive compensation, particularly when conducted annually and in the off-season following the shareholder meeting. 

Below is a sample agenda for such a summit with explanatory notes.

This agenda and any relevant materials should be circulated in advance so all parties can review and participate thoughtfully.  Presenters for each item should be assigned in advance.

While the Compensation Committee Chair or other directors may attend, it is often more effective (and preserves the independence of the committee) if directors abstain from the meeting’s deliberations. This avoids turning the summit into a de facto board meeting and allows management and the advisors to brainstorm freely. 

Instead, the Compensation Committee Chair may join briefly to express their expectations and thoughts on the next year, and then sign off.

After the meeting, the material outcomes are communicated to the Chair by either the compensation committee’s advisors or management. These outcomes then inform management’s proposals submitted to the committee in the normal course.

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2025 Executive Compensation Summit Agenda

Participants: 

• Human Resources (Chief People Officer, Director of Compensation)

• Legal (General Counsel, External Counsel)

• Compensation Consultant 

• Finance/Tax (if necessary) 

Note: The working group should include both senior decision-makers and relevant technical personnel to ensure that all the necessary expertise is available for deliberation.

Items for Discussion: 

[Compensation Committee Chair Calls In]

1. Introductory Remarks from Compensation Committee Chair

[Compensation Committee Chair Signs-Off]

Note: The Chair’s comments set the tone for the meeting and give direction to the working group.  The Chair should therefore come prepared with input from the other committee members on items for discussion. Before the summit, the committee’s advisers and outside counsel can help the Chair synthesize that input and properly frame the issues. 

2. Review Compensation Philosophy  

   
   

Note: A regular review of the philosophy ensures alignment with company’s evolving business strategy and market landscape, especially in times of transition (e.g., stalled growth, major organizational changes, new strategic plans). 

3. Review 2024/2025 Executive Compensation Structure 

   
   

4. Review Bonus/PRSU pacing, and any anticipated non-GAAP adjustments

   
   

Note: The group can discuss if the incentive plans are effectively motivating performance, and how shareholders and the proxy advisor firms have reacted to the current design or will react to the anticipated payouts under the incentive plans.

Time may be reserved to address any open technical questions (e.g., payout timing, vesting triggers, proper pacing calculations).

5. Review Proposed 2026 Compensation Structure

Note: After reviewing the in-flight plans, the team is prepared to discuss the go-forward compensation structure. This discussion should consider the say-on-pay vote, investor sentiment, proxy advisor feedback, disclosure concerns, and – perhaps most importantly – how the structure should be updated to effectuate the goals of the Board.

6. Review 2026 CEO Compensation Considerations

   
   

This dialogue occurs before work formally begins on a CEO pay proposal, but allows the group to frame that discussion in light of the recent say-on-pay vote.   The discussion should involve the CEO’s compensation relative to performance and peer compensation, and the CEO’s expectations for the next year. Management should solicit the CEO’s input ahead of the summit to ensure it is accurately represented.

7. Discuss Off Season Shareholder Outreach Plan/Timeline/Objectives 

We recommend the team draft or review a timeline and outreach strategy, highlighting likely pressure points and messaging priorities.

8. Review CD&A/Proxy Design Update 

This discussion will focus on anticipated year over year material changes to the CD&A and proxy, and how those changes will be received by investors and the proxy advisors.  

9. Review Compensation Committee Annual Calendar

Finally, the group should confirm that the calendar accurately includes all required items from the committee’s charter and identify any pain points or inefficiencies that can be addressed for the coming year.