The responsibilities of today’s compensation committee chairs have grown increasingly complex. With the onset and transparency of Say on Pay, overseeing the committee that structures executive compensation has become akin to walking a tightrope. Today’s compensation chairs have the heightened responsibility of communicating to both shareholders and proxy advisors—a task that, to say the least, requires a knowledgeable board member.
In this episode, Michael Brittian of Meridian Compensation Partners outlines best practices regarding the recruitment, rotation, and transition of compensation committee chairs. We explore the following questions:
- What are the most important skill sets for today’s compensation committee chairs?
- How long should the compensation chair serve? Should there be a limit placed on tenure?
- What steps should the board follow for transitioning a new chair?
Brittian outlines a roadmap for the outgoing chair, senior management, and the outside advisor to ensure a successful passing of the baton. He also presents several tactics, which boards have used in the past, that have been proven to promote a smooth transition and education process.