News Column

Meridian Compensation Partners Completes 2014 Trends and Developments in Executive Compensation Survey

May 23, 2014



LAKE FOREST, Ill.--(BUSINESS WIRE)-- Meridian Compensation Partners, LLC found that a majority of companies are going to greater lengths to enhance shareholder engagement as they seek to demonstrate a strong relationship between executive pay and performance. This finding comes from Meridian’s 2014 Trends and Developments in Executive Compensation Survey, which consists of over 120 major companies with median revenues of $3.9 billion and median market values of $6.2 billion.

According to Jerrold Rosema, a consultant at Meridian, “Companies are clearly making a more concerted effort to demonstrate a strong relationship between their executive compensation program designs and performance. To do this, most companies are going above and beyond the boiler plate proxy disclosures required by regulators. We are seeing companies use supplemental tables that include realized or realizable pay, as well as other charts and exhibits in order to tell their story.”

In addition, the 2014 survey also found that just over one-half of companies (56%) reported 2014 annual incentive payouts (for 2013 performance) were above target; of the companies that paid out below target, a majority were only slightly below target (i.e., 75%-94% of target). Companies continue to set more challenging performance goals as the broader economy continues its slow recovery.

For senior executives, long-term incentives continue to be the largest component of their total compensation. Within the long-term incentive segment, performance plans now make 53% of total 2014 grant values, with stock options down to only 18%. A slight majority of companies using long-term performance awards use relative TSR measured over a 3-year period.

Additionally, companies continue to expect, and receive, strong shareholder support on Say on Pay. The great majority of companies (96%) expect to receive shareholder support well above the critical level (70%) in 2014, typically in the mid 90’s.

About Meridian Compensation Partners

With over fifty associates in eight offices in the United States and Canada, Meridian’s executive compensation consultants provide independent, trusted counsel to Boards and Management at hundreds of large companies in North America. We consult on executive compensation and its design, amounts and governance. Visit us at www.meridiancp.com




Meridian Compensation Partners, LLC

Jerrold Rosema, (847) 235-3600

rosema@meridiancp.com

www.meridiancp.com


Source: Meridian Compensation Partners, LLC


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