NFP Compensation Insights | March 2023
The Evolving Role of the Compensation Committee
The role of the compensation committee continues to evolve and grow in complexity. Members can now expect to have more responsibilities as their roles expand into unchartered areas due to rising pressures from shareholders, proxy advisory firms and employees themselves.
In this month’s featured article, NFPCC shares thoughts on the future of compensation committees, key topics to consider in 2023 and simple tips to effectively navigate the changes in their expanding roles. By remaining vigilant and planning ahead, compensation committees can ensure important items are addressed as smoothly as possible. We know rapid change can be difficult and hope you find this information helpful as you plan for the year. Don’t hesitate to reach out to NFPCC for extra support or guidance with your compensation planning, meetings or disclosures.
By Kyle Lamport
It’s no secret that the role of the Compensation Committee has been evolving for some time now. It is safe, however, to say that sitting on a Compensation Committee (or board for that matter) is not what it used to be. What was merely a fiduciary role to shareholders has now grown in equal parts of responsibility and complexity.
A Quick Glance at the Radar for Compensation Committees
A successful navigation of the executive compensation landscape requires that you periodically scan the radar to make sure you’re on track and avoiding obstacles. As a compensation committee member, below are a few new developments you should have on your radar this spring and summer.
Getting Started: Private Company Compensation Committees
While the work of public company compensation committees is well understood and receives considerable investor attention, the same cannot be said for private company compensation committees. Most private company boards don’t use standing subcommittees, so the owners lack the point of view of public company directors experienced in this type of work.
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