As the COVID-19 pandemic initially began to unfold, executive leadership teams and boards of directors were understandably focused on the humanitarian and business continuity impacts of the crisis. They had to keep employees safe, shift most operations to virtual and work-from-home settings, maintain supply chains and dramatically alter procedures for public-facing or manufacturing areas of the business that remained open. While this work continues, companies are shifting their focus to prepare for the long-term economic impact of the COVID-19 pandemic and a new normal for business operations.
In recent weeks, this shift is becoming apparent, as more companies take actions to manage costs via workforce reductions or cuts in pay. Given the impact of these policies on executives and employees, it is important to ensure board of director pay programs remain aligned to the rest of the business. This is true for private and public companies alike.
Yet, our analysis of recent public disclosures shows that while companies are adjusting executive pay at an accelerated rate, they are generally reluctant to adjust board of director pay. Given this trend, we decided to leverage our survey data and tools to understand today’s baseline for private vs. public board of director pay and explore what this baseline might tell us about potential changes down the road.
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