Simpson Thacher Lawyers Author Article on Performance-Based Compensation Issues Raised by COVID-19 Pandemic
06.02.20
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Partners Greg Grogan, Jeannine McSweeney, Andrew Blau and David Rubinsky, and Counsel Eric Wolf authored an article titled, “Compensation Impacts of COVID-19 on Performance-Based Incentive Awards,” which was published by the Harvard Law School Forum on Corporate Governance. The article highlighted how, in the wake of the COVID-19 pandemic, both private and public companies should examine how best to address the impact of the pandemic on performance-based compensation; specifically, establishing new performance-based compensation awards for 2020, adjusting existing performance goals for both annual and long-term incentive compensation and revisiting the form and vesting terms for equity-based compensation. The article further discussed select issues that companies may face and strategies that they can take to continue to retain top talent and ensure alignment between the goals of companies and the incentives of their key employees during the pandemic. The article also suggested that all companies consider employee messaging and compliance with incentive plan documents, as well as comprehensively analyze the legal, tax and accounting implications when implementing or adjusting equity programs.
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