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En prépublication : « Rémunération des hauts dirigeants au temps de la COVID-19 – Lecture éthique et juridique » du Professeur Ivan Tchotourian et Camille d’Astous

Ivan Tchotourian et Camille d’Astous publient un chapitre portant sur la rémunération des hauts-dirigeants en temps de COVID-19. Ce chapitre sera publié dans l’ouvrage « La rémunération dans tous ses états  » aux Presses de l’Université Laval sous la direction d’ Yves Hallée, Renée Michaud et Patrice Jalette, à paraître.

Rémunération des hauts dirigeants au temps de la COVID-19 – Lecture éthique et juridique

La rémunération des hauts-dirigeants constitue depuis de nombreuses années un sujet intarissable de discussions et de débats. La littérature universitaire est foisonnante et la presse amène son lot quotidien d’affaires. Alors que les montants de cette rémunération n’ont cessé de croître, les États avancent en ordre dispersé sur cette problématique. Si certains se montrent discrets laissant le contrôle de la rémunération au marché, d’autres sont plus proactifs et ont fait évoluer leur droit. Toutefois, la rémunération demeure un thème que le juriste peine à encadrer comme en témoignent l’incohérence ou l’insuffisance de certaines modifications législatives. Une des questions qui se pose est de savoir si, au final, les modifications constituent des réactions de circonstances ou, au contraire, démontrent une démarche éthique pour promouvoir un bon comportement. Sans une recherche de plus d’éthique, le droit ne se révèle-t-il pas impuissant à changer les comportements en ce domaine ? Le contexte de la COVID-19 enrichit la réflexion sur les liens entre rémunération, positionnement du droit et éthique. La pandémie mondiale démontre que l’éthique n’a pas peut-être pas besoin de droit, sauf que la place et la pérennité de l’éthique en matière de rémunération apparaissent incertaines.



À très vite pour de nouvelles publications…

Gouvernance Normes d'encadrement rémunération

Rémunération et COVID-19

L’Harvard Law School Forum on Corporate Governance publie une intéressante synthèse portant sur la rémunération des hauts dirigeants en période post-pandémie : « Evolving Compensation Responses to the Global Pandemic » (par Mike Kesner, Sandra Pace et John Sinkular, 7 novembre 2020).

Résumé :

  • For many of the companies severely harmed by the global pandemic, immediate cost-cutting measures were necessary to protect the business including furloughs, layoffs, suspended 401(k) matching contributions, and base salary reductions for most/all of the workforce.
  • Many of these companies approved their fiscal 2020 annual and long-term incentive (LTI) plans and prior LTI performance awards (i.e., 2018-2020 and 2019-2021 cycles) without any consideration for a global pandemic. These incentives often represent ≥50% of an executive’s annual compensation (≥70% in the case of the CEO), and it is highly likely the performance-contingent incentives are tracking to a zero payout and time-vested restricted stock units (RSUs) have greatly diminished in value.
  • The reduced value of realizable compensation directionally aligns with companies’ pay-for-performance (P4P) philosophies; however, the reductions are largely based on an unprecedented shutdown of the global economy due to health concerns and a reshaping of how many companies will “do business” now and into the future.
  • Severely harmed companies are assessing the near- and long-term implications of the downturn on all stakeholders and determining if changes to annual and long-term incentive programs are appropriate to balance the company’s talent goals with its P4P philosophy.

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actualités internationales Gouvernance Normes d'encadrement place des salariés rémunération

Entreprises européennes, salariés et dividendes : tendance

Dans un article du Financial Times (« European companies were more keen to cut divis than executive pay », 9 septembre 2020), il est observé que les assemblées annuelles de grandes entreprises européennes montrent des disparités concernant la protection des salariés et la réduction des dividendes.

Extrait :

Businesses in Spain, Italy, the Netherlands and the UK were more likely to cut dividends than executive pay this year, despite calls from shareholders for bosses to share the financial pain caused by the pandemic.

More than half of Spanish businesses examined by Georgeson, a corporate governance consultancy, cancelled, postponed or reduced dividends in 2020. Only 29 per cent introduced a temporary reduction in executive pay. In Italy, 44 per cent of companies changed their dividend policies because of Covid-19, but just 29 per cent cut pay for bosses, according to the review of the annual meeting season in Europe.

This disparity between protection of salaries and bonuses at the top while shareholders have been hit with widespread dividend cuts is emerging as a flashpoint for investors. Asset managers such as Schroders and M&G have spoken out about the need for companies to show restraint on pay if they are cutting dividends or receiving government support. “Executive remuneration remains a key focal point for investors and was amongst the most contested resolutions in the majority of the markets,” said Georgeson’s Domenic Brancati.

But he added that despite this focus, shareholder revolts over executive pay had fallen slightly across Europe compared with 2019 — suggesting that investors were giving companies some leeway on how they dealt with the pandemic. Investors could become more vocal about this issue next year, he said.

One UK-based asset manager said it was “still having lots of conversations with companies around pay” but for this year had decided not to vote against companies on the issue. But it added the business would watch remuneration and dividends closely next year.

Companies around the world have cut or cancelled dividends in response to the crisis, hitting income streams for many investors. According to Janus Henderson, global dividends had their biggest quarterly fall in a decade during the second quarter, with more than $100bn wiped off their value. The Georgeson data shows that almost half of UK companies changed their dividend payout, while less than 45 per cent altered executive remuneration. In the Netherlands, executive pay took a hit at 29 per cent of companies, while 34 per cent adjusted dividends. In contrast, a quarter of Swiss executives were hit with a pay cut but only a fifth of companies cut or cancelled their dividend.

The Georgeson research also found that the pandemic had a significant impact on the AGM process across Europe, with many companies postponing their annual meetings or stopping shareholders from voting during the event.

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Gouvernance rémunération Responsabilité sociale des entreprises

Rémunération et COVID-19 : étude américaine sur les impacts de la pandémie

Dans un article intitulé « The Pandemic and Executive Pay », Aniel Mahabier, Iris Gushi, and Thao Nguyen reviennent sur les conséquences de la COVID-19 en termes de niveaux de rémunération des CA et des hauts-dirigeants. Portant sur les entreprises du Russell 3000, cet article offre une belle synthèse et est très parlante.

Extrait :

Is Reducing Base Salary Enough?

While salary reductions for Executives are greatly appreciated in this difficult time and are meant to show solidarity with employees, the fact is that base salary is only a fraction of the often enormous compensation packages granted to CEO’s and other Executives. Compensation packages predominately consist of cash bonuses and equity awards. Even though 80% of the Russell 3000 companies have disclosed 2019 compensation for Executives, we have not witnessed any companies making adjustments to these figures in light of the crisis, even for companies in hard-hit industries.

Edward Bastian, CEO of Delta Airlines, has agreed to cut 100% of his base salary for 6 months, [1] which equals USD 714,000, but still holds on to his 2019 cash and stock awards of USD 16 million, which were granted earlier in 2020. [2] Another interesting case is MGM Resorts International, where CEO Jim Murren was supposed to stay through 2021 to receive USD 32 million in compensation, including USD 12 million in severance. According to the terms of his termination agreement, he would not receive the compensation package if he left before 2021. [3] However, days after he resigned voluntarily in March, MGM announced that his resignation would be treated as a “termination without good cause”, which would qualify him to receive the full USD 32 million package. [4] In the meantime, 63,000 employees of MGM have been furloughed and will possibly be fired. [5]

Furthermore, activist investors have begun to feel unhappy about some executive pay actions amid the pandemic. CtW Investment Group, an investor of Uber, urged shareholders to reject Uber’s compensation package at the Annual General Meeting since it includes a USD 100 million equity grant to the CEO. [6]

While the ride-hailing company has suffered from a USD 2.9 billion first quarter net loss in 2020 [7] and planned to lay off 6,700 employees [8] (about 30% of its workforce), its CEO Dara Khosrowshahi only took a 100% base salary cut from May until the end of 2020, [9] which totals USD 666,000, and took home a USD 42.4 million pay package for 2019.

The same investor also urged shareholders of McDonald’s to vote against the USD 44 million+ exit package, including USD 700,000 in cash severance, for former CEO Stephen Easterbrook, who was fired last year over violation of company policies due to his relationship with an employee. [10]

The investor’s efforts failed in both instances and the CEO’s took home millions of dollars while their companies are struggling.

Since the COVID-19 outbreak, a number of public companies have gone bankrupt. Nevertheless, large sums of compensation were paid out to their Executives. Retailer J. C. Penney paid almost USD 10 million in bonuses to top executives [11] and oil company Whiting Petroleum issued USD 14.6 million in bonuses for its C-suite, [12] just days before both companies filed for bankruptcy.

Another school of thought is that the practice of issuers deferring executive salary cuts into RSUs will give rise to huge payouts in the future when the market eventually recovers and share value increases. This means that Executives who deferred their base salary have made a sacrifice that ultimately will benefit them, defeating the purpose of pay cuts.

Although the economic impacts of the pandemic on businesses are still on-going, the number of pay cuts announced has slowed since the end of May. As the effects continue to unfold over the next months, we expect companies to continue to re-evaluate their executive compensation policies. COVID-19 has changed daily lives, business operations, and the economy. Even though we will only know the full extent of impact in the second half of 2020, COVID-19 will certainly change executive pay and corporate governance practices in the future.

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actualités internationales Gouvernance rémunération

High Pay Center : rapport et impact de la COVID-19

Le High Pay Centre anglais vient de publier son rapport 2019 sur la rémunération des hauts dirigeants : « HPC/CIPD Annual FTSE 100 CEO Pay Review – CEO pay flat in 2019 ». Je vous laisse découvrir les chiffres, mais j’attire votre attention sur les conséquences de la COVID-19.

Extrait :

Covid-19 pay cuts

  • 36 FTSE 100 companies have announced cuts to executive pay in response to the COVID-19 crisis and economic downturn. 
  • While most of the 36 companies have used a combination of measures to cut pay, the report suggests these are mainly superficial or short-term. The most common measure, taken by 14 companies, has been to cut salaries at the top by 20%. However, salaries typically only make up a small part of a FTSE 100 CEO’s total pay package.
  • 11 companies have cancelled Short-Term Incentive Plans (STIPs) for their CEOs while two other firms have deferred salary increases for their CEOs. None of the 36 companies have chosen to reduce their CEO’s Long-Term Incentive Plan (LTIP), which typically makes up half of a CEO’s total pay package.

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actualités internationales Divulgation Gouvernance normes de droit Nouvelles diverses rémunération Responsabilité sociale des entreprises

Ratio d’équité : la solution ?

Bel article de Vanessa Serret et Mohamed Khemissi dans The conversation (27 juillet 2020) : « Rémunération des dirigeants : la transparence ne fait pas tout ». Cet article revient sur le ratio d’équité : non seulement son utilité, mais encore son niveau (20 ? 100 ?…)

Extrait :

Pour la première fois, les entreprises cotées doivent publier dans leurs documents d’enregistrement universel un ratio d’équité. Il s’agit d’une exigence de la loi Pacte.

Le ratio d’équité apprécie l’écart entre la rémunération de chaque dirigeant et le salaire (moyen et médian) des salariés à temps plein de son entreprise. Il est prévu un suivi de l’évolution de ce ratio au cours des cinq derniers exercices et sa mise en perspective avec la performance financière de la société. Ces comparaisons renseignent sur la dynamique du partage de la création de valeur entre le dirigeant et les salariés.

(…)

Un premier état des lieux

Sur la base des rémunérations versées en 2019 par les entreprises composant l’indice boursier du CAC 40, les patrons français ont perçu un salaire moyen de 5 millions d’euros, soit une baisse de 9,1 % par rapport à 2018.

Évolution du ratio d’équité par rapport à la rémunération moyenne (bleu) et médiane (orange) des salariés de 2015 à 2019. auteurs

Ce chiffre représente 53 fois la rémunération moyenne de leurs employés (72 fois la rémunération médiane) : un ratio acceptable, selon l’agence de conseil en vote Proxinvest. En effet, selon cette agence, et afin de garantir la cohésion sociale au sein de l’entreprise, le ratio d’équité ne doit pas dépasser 100 (par rapport à la rémunération moyenne des salariés).

Deux dirigeants s’attribuent néanmoins des rémunérations qui dépassent le maximum socialement tolérable à savoir Bernard Charlès, vice-président du conseil d’administration et directeur général de Dassault Systèmes et Paul Hudson, directeur général de Sanofi avec un ratio d’équité qui s’établit respectivement de 268 et de 107.

Notons également que pour les deux sociétés publiques appartenant à l’indice boursier du CAC 40, le ratio d’équité dépasse le plafond de 20 (35 pour Engie et 38 pour Orange) fixé par le décret n° 2012-915 du 26 juillet 2012, relatif au contrôle de l’État sur les rémunérations des dirigeants d’entreprises publiques.

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actualités internationales Gouvernance rémunération

COVID-19 : quel impact sur la rémunération des dirigeants américains ?

L’Harvard Law School Forum on Corporate Governance publie un bel article sur les conséquences de la COVID-19 sur la rémunération des hauts dirigeants des entreprises américaines : « COVID-19 and Executive Pay: Initial Reactions and Responses«  (de Stephen Charlebois, Phillip Pennell, and Rachel Ki).

Extrait :

Though businesses have managed executive pay programs through tough economic conditions before, they now must do so under an unprecedented confluence of external expectations and scrutiny, from the advent of Say on Pay to increased shareholder engagement to the beginning of an era of stakeholder primacy.

While results vary across industries, findings indicate that a majority of U.S. corporations have not yet formulated a response to COVID-19 on executive pay but anticipate taking some form of action later in 2020.

What should you take away from the results of this survey?

  • There is no universal response. Findings indicate a variety of approaches influenced by company outlook, industry dynamics and broader context
  • That said, most companies are delaying action until there is greater clarity. Companies that already made pay decisions are generally waiting until payout determinations to see if adjustments are necessary, and those that have not yet made decisions in 2020 are delaying until the impact of COVID-19 is better understood
  • Companies acting now are doing so out of necessity and are primarily in the hardest-hit industries where immediate cash preservation is a key priority

What are key considerations going forward?

  • Timely, effective communication is key. Shareholders, employees and customers are all closely monitoring the actions companies are taking in response to the crisis; if decisions are made, transparent and honest communication can build positive alignment and strengthen relationships with key stakeholders
  • Align executive pay with the stakeholder experience. Company actions are being closely monitored and the expectation is that shareholder experience should be reflected in compensation decisions (i.e., significant shareholder value losses or headcount reductions are accompanied by lower pay outcomes for executives)
  • Establish objective principles for using discretion. While quantitative metrics may be difficult to rely on at this time, establishing a list of factors for Committees to consider if they decide to apply discretion at the end of the year will allow companies to demonstrate that decisions were made in ways that demonstrably tie back to business context.

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