Underwater Performance Equity: How to Restore Incentives

Alec Katric Takis Makridis

Just as low-performing companies can hit their goals (a rising tide lifts all boats), high-performing companies can miss theirs. That’s the reality of setting performance goals amid tremendous microeconomic and macroeconomic uncertainty.

How should companies in this situation respond? Is there a way to restore the motivational impact of incentive goals? In this issue brief, we provide a handful of strategies for how to deal with performance awards that aren’t faring well, along with some important governance and reporting implications to consider.

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