James OkaforCRP, CEP
VP, Total Rewards, Halcyon Financial Group
Nadia Haddad· Director of Rewards, MEA, Qasr Holdings
Asked in Executive Compensation ·
Retention awards for the executive team after the CEO left suddenly: is there a clean way?
Listed technology company in the Netherlands, about 2,800 employees. Our chief executive resigned in March to join a competitor. The supervisory board has appointed the CFO as interim and is running a search that will take six to nine months.
The chair wants to make retention awards to the five remaining members of the executive team. The proposal on the table is 100% of salary in restricted shares, vesting after two years with no performance condition.
Our policy has no provision for this, so it would need the discretion clause, and I expect investors to object. Is there a structure that achieves the retention without a poor vote on the report?
1 agree · 3 replies · 5 views
Accepted answer· by Dana Whitfield
What we did in a similar position: no new grant on top. We brought forward the next annual long-term grant by six months and enlarged it by half, keeping the usual performance conditions but adding a clause that the award lapses in full if the executive resigns within 24 months of the new chief executive starting. Investors saw performance-linked pay with a longer hook, within policy limits. The executives saw meaningful value tied to staying through the transition. No discretion clause was needed and the report passed with 94%.
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