As the economic repercussion of the COVID-19 pandemic is
becoming increasingly severe, employers should consider its
potential impact on the design and administration of various
compensation and employee benefit arrangements.
Performance-Based Compensation Programs.
Due to the economic uncertainty created by the pandemic,
employers with a performance-based compensation program (whether in
the form of a short-term cash bonus or a long-term equity award)
may need to adjust the existing performance targets, introduce new
performance metrics, or otherwise design an alternative or
additional incentive program. In doing so, employers should
consider the following:
- The plan document may contain a broad
adjustment provision that could reasonably be interpreted to
authorize adjustments to performance targets for COVID-19-related
events. Even if no such provision exists, the plan or related award
agreements may be amended to provide for the adjustments or, in the
case
