Corporate Governance
Executive compensation
Executive compensation has become a lightning rod for critics of corporate governance and the role of independent directors. Shareholders are expressing their views through advisory 'say on pay' votes in a growing number of countries, including the United States, and some jurisdictions are adopting policies that will make these votes legally binding. Regulators are demanding greater disclosure of the details of executive compensation packages, and a few are calling for outright caps on pay.
Now more than ever, effective compensation must balance long-term company performance and growth, with the creation of shareholder value and appropriate rewards for individual executives. Successful compensation committees achieve this balance by developing pragmatic compensation policies, seeking innovative approaches to pay, reviewing the actual results, and maintaining an unwavering focus on the alignment between pay and performance.
These leading compensation committees frequently revisit and test their compensation philosophy to ensure that it is aligned with the corporate strategy. They focus on developing short-term and long-term incentives, and they believe in and exercise discretion – upwards and downwards – to correct for irregularities that may emerge.
The members of Tapestry's networks are actively discussing these issues, and generating insights about effective practices with fellow directors, investors, regulators, proxy advisors, and other stakeholders.
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