1. 1. Luis Navas and Global GovernanceAdvisors: Understanding Trends in Executive Incentive Plans
2. 2. At a time when executive pay is under increasingscrutiny, Global Governance Advisors Vice Chair LuisNavas guides an independent, best-practices-focused firm with offices in Canada and the UnitedStates. A June 2012 Globe and Mail article on executivecompensation included an in-depth, online discussionbetween a Global Governance Advisors ManagingPartner and a reporter for The Globe.
3. 3. One key discussion point centered on the relativelymodest 6 percent increase in CEO compensationexperienced over the past year. The GGA partner noted that this trend of lowerincentive pay is likely to continue in the short term, asglobal companies weather the European currencycrisis. This reflects the fact that incentive plans for manyNorth American firms are funded through achievingstellar results in international markets.
4. 4. The GGA partner noted the distinction between annualbonus incentive pay and long-term incentive vehiclessuch as performance share units, restricted share units,cash equivalent units, and stock options. As these increasingly prominent incentive componentsmeasure corporate results over the long term, overalltrends are less clear.