NACD Compensation Committee Chair Advisory Council: Effective Practices for Goal Setting and Using Nonfinancial Metrics
In brief: Corporate executives are navigating an increasingly complex business environment, and directors might wonder what effective practices they should consider when setting goals for CEO performance and pay.
At a recent meeting of the NACD Compensation Committee Chair Advisory Council, Fortune 500 directors discussed the following topics:
- Choosing goals and metrics based on company strategy and value drivers.
- Factoring in relative performance versus peers.
- Using nonfinancial metrics to drive behavior.
- Engaging with investors to clarify the link between compensation goals, metrics, and strategy.
This resource can help your board:
- Consider when the use of nonfinancial metrics is appropriate.
- Understand how other boards incorporate relative performance versus peers into the compensation plan.
Most relevant audiences: Compensation committee members