Now that the sweeping effects of the coronavirus pandemic are
starting to settle in, employers should be prepared to address
executive compensation issues that will arise with respect to top
tier management and broader talent throughout the organization.
Executive contracts, equity incentive compensation and
performance-based compensation programs may all be impacted by the
abrupt economic downturn and cash flow issues facing many
businesses.
Below are executive compensation considerations that employers
will want to address in the days and weeks ahead.
Salary Changes
Employers facing downturns in their business may consider
reducing employees' salaries. Generally, employers may not
reduce salaries without providing notice to employees. In addition,
before reducing salaries, employers should review the employment
agreements that they have entered into with their executives.
