Nadia Haddad· Director of Rewards, MEA, Qasr Holdings
Asked in Executive Compensation ·
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 · 6 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%.
Read in the conversation ↓
James OkaforCRP, CEP
VP, Total Rewards, Halcyon Financial Group
Ask first who is actually at risk. When we went through this, the chair assumed all six executives might leave. A frank conversation showed that two had approaches from elsewhere and four did not. We made two awards, disclosed why, and had very little reaction.
Priya RaghunathanGRS, CSI
Head of People Analytics, Calibre Software
Do not forget the interim. Our interim chief executive received a monthly allowance of 30% of salary for the period, cash, ending the day the successor started. That is simple, proportionate and easy to explain. It is also separate from retention and should be disclosed separately.
