US companies rework bonus plans to protect executive pay
Executives at some of America’s publicly listed companies will earn millions of dollars in equity-based bonuses this year because sympathetic boards have reworked their incentive plans — even though stock market declines have wiped trillions of dollars off corporate valuations.
Companies adjusted bonus plans in 2020 to account for the coronavirus pandemic and have since revisited pay and eased performance assessments in response to inflation, energy crises and other macroeconomic problems, said Matteo Tonello, a managing director at the Conference Board, an economic research organisation.
Among them are hard drive manufacturer Western Digital, which this month said it paid chief executive David Goeckeler $32mn, up from $17mn in 2021, after scrapping performance goals tied to its share price. Western Digital’s shares are down more than 47 per cent in 2022, compared to about a loss of 22 per cent for the S&P 500 index.
Because Covid-19 was a global phenomenon outside corporate executives’ control, companies felt they needed to rework bonus plans early in the pandemic, said Courtney Yu, director of research at Equilar, a pay data company.
This story originally appeared on: Financial Times - Author:Patrick Temple-West
