The Harvard Law School Forum on Corporate Governance and Financial Regulation » Incentives

CAP analyzed annual incentive plan payouts over the past ten years of 120 large U.S. public companies, with a median revenue of $43B. We selected these companies to span ten major industries and ...

https://corpgov.law.harvard.edu/2024/04/17/annual-incentive-plans-payouts-and-performance-alignment/

Evolution of Executive Pay Design The evolution of executive compensation has been influenced by several factors, including: Market competition for executive talent Increased size and complexity ...

https://corpgov.law.harvard.edu/2024/02/18/compensation-design-calls-for-radical-simplification/

Introduction One of the more complex issues when measuring performance for incentive plan purposes is how to consider the effect of mergers, acquisitions, dispositions, and the related transactio...

https://corpgov.law.harvard.edu/2024/01/27/non-gaap-adjustments-impact-of-merger-and-acquisition-activity-on-performance-targets-and-results/

Introduction The reporting of “non-GAAP” (Generally Accepted Accounting Principles) financial metrics is a common practice among companies. These adjusted metrics are useful to investors and ...

https://corpgov.law.harvard.edu/2024/01/11/impact-of-non-gaap-earnings-and-adjustments-on-incentive-plan-payouts/

INTRODUCTION ESG metric prevalence in incentives continues to increase among S&P 500 companies but at a slower rate than prior years, as market focus shifts to refining existing ESG metric types ...

https://corpgov.law.harvard.edu/2023/09/03/esg-incentives-2023-report/

Incentives Linked to ESG Metrics Among S&P 500 Companies Overall Prevalence In 2023, 73% of S&P 500 companies linked a portion of incentive compensation to the achievement of ESG metrics, up mode...

https://corpgov.law.harvard.edu/2023/07/20/incentives-linked-to-esg-metrics-among-sp-500-companies/

Key Takeaways While most S&P 500 companies conducting buybacks in 2018–2021 did not adjust performance goals or incentive awards to account for the lower share count post buyback, those conduct...

https://corpgov.law.harvard.edu/2023/07/16/share-buybacks-and-executive-compensation-assessing-key-criticisms/

Key Takeaways Shareholders and companies may find the results of our comparison of Compensation Actually Paid (CAP), as presented in the new Pay Versus Performance (PVP) tables in 2023 proxy stat...

https://corpgov.law.harvard.edu/2023/06/26/demonstrating-pay-and-performance-alignment/

In the United States and around much of the globe, the 2023 proxy season looks set to take place in the first protracted bear market for more than a decade. That will have an impact on how shareh...

https://corpgov.law.harvard.edu/2023/04/16/back-to-the-future-option-repricing/

Rate regulated public utilities supply one-third of the electricity in the United States and own nearly all of the transmission and distribution lines that transport electricity to meet customer ...

https://corpgov.law.harvard.edu/2023/04/11/the-corporate-governance-of-public-utilities/

Our Engagement Priorities BlackRock Investment Stewardship’s (BIS) Engagement Priorities reflect the five themes on which we most frequently engage companies, where they are relevant, as these ...

https://corpgov.law.harvard.edu/2023/03/31/investment-stewardship-engagement-priorities/

Standard models of executive compensation assume that a manager cares about pay only because it allows him to consume more. He will only improve performance if doing so increases his pay, and the...

https://corpgov.law.harvard.edu/2023/03/29/a-theory-of-fair-ceo-pay/

This post investigates compensation actions for CEOs and CFOs at S&P 1500 companies that have fiscal year ends between 9/30 and 11/30. The sample consists of fifty cross-industry companies with m...

https://corpgov.law.harvard.edu/2023/03/28/an-early-look-at-2023-ceo-cfo-pay-actions/

On February 24, 2023, the US Department of Justice (DOJ) rolled out a corporate self-disclosure policy (the Policy) to be applied by all 93 US Attorneys’ Offices throughout the country. The d...

https://corpgov.law.harvard.edu/2023/03/23/doj-new-corporate-self-disclosure-policy/

The common perception of managerial positions is that they come with more responsibility and oversight authority. For instance, managers frequently oversee budgets and work schedules, Additionall...

https://corpgov.law.harvard.edu/2023/03/07/too-many-managers-the-strategic-use-of-titles-to-avoid-overtime-payments/

Introduction As we continue our IPO-related Viewpoint series, we note the marked reduction in the number of traditional or SPAC-related initial public offerings (IPO) in 2022 when compared to 202...

https://corpgov.law.harvard.edu/2022/10/20/ipo-readiness-ipo-equity-awards/

Introduction Board members at privately held and family-owned companies play an important role in governance and oversight and should be appropriately compensated for their contributions and effo...

https://corpgov.law.harvard.edu/2022/10/11/private-company-board-compensation-and-governance/

We develop a framework based on empirical evidence that identifies the optimal structure of corporate and individual liability when laws can deter through their ability to express social condemna...

https://corpgov.law.harvard.edu/2022/09/26/battle-for-our-souls-a-psychological-justification-for-corporate-and-individual-liability-for-organizational-misconduct/

One of a board’s most important responsibilities is selecting the CEO. Most boards have annual succession planning discussions and robust procedures to prepare for a transition. But, recognizin...

https://corpgov.law.harvard.edu/2022/09/24/how-compensation-decisions-support-ceo-succession/

The banking industry has undergone substantial changes since the late 1970s, largely due to deregulation and rapid market developments. Over that period, banks’ growth opportunities expanded, a...

https://corpgov.law.harvard.edu/2022/09/14/deregulation-and-board-policies-evidence-from-performance-measures-used-in-bank-ceo-turnover-decisions/