Ceos who said too much

The other area that was no surprise to me was the tension CEOs feel about the perceived tradeoffs between sustainability and traditional financial metrics. While I feel that this tension has always been overstated — sustainability creates business value in multiple ways — there is a real tension between short-term profit and long-term value. Some surprising findings. In addition, some of the results on how sustainability creates value were somewhat odd to me.

The promising and reassuring results. In another piece of good news, some barriers to action seem to be dropping. On the biggest challenge of our times, climate change, the denial level in the c-suite has shrunk dramatically in my anecdotal experience and in the data in this report. Companies no longer see climate change as an issue for future leaders to manage. One other clear theme emerged around trust and expectations from society. Three-quarters of CEOs said citizen trust would be critical to competitiveness.

Dan Amos, who has been CEO of Aflac for 31 years, said he is writing more handwritten notes to employees than he has "ever done in my life. If companies return to a world where half of a meeting's attendees are in person and half are joining by video, "I guarantee you the half online would feel out of place," said Jack Remondi, Navient CEO. Hybrid work models can be "well-orchestrated," according to Tiger Tyagarajan, CEO of global consulting firm Genpact , but like many CEOs, he remains concerned about building and maintaining a culture in the new work norm.

There is a danger of losing some things. Some of the things we used to have we need to bring back with all of the things we learned. That's the tough part of the mixture," he said. Genpact has instituted a few simple rules for the new work environment, and as more workers think about coming back to offices, on a hybrid basis. Genpact employees are being told to think about coming to the office as a "team sport.

Amid the broader human dimensions in decision-making and employer-employee relationships, the global economy rattled by labor shortages and supply chain cracks is testing these leaders in specific ways. While a work world leaning into tech has opened up opportunities to recruit from anywhere, and firms including Cerevel have removed restrictions on C-suite executives needing to relocate to its Boston base, the labor shortage is hitting some organizations hard. The reevaluation of life and work caused by the pandemic also is weighing on staffing, Jenkins said, with experienced nurses who had five to seven years of a typical career left now saying, "I'm done.

In , for example, C. Cynthia Murray, 64, is a Walmart associate in Maryland who has worked for the retailer for 20 years. Why shouldn't they take some of that money and give back by raising workers' wages?

Walmart has represented a ladder of opportunity and we are committed to our associates' long-term success. The pandemic has made life harder for many workers, and some lost their jobs altogether. Those who hung on, especially front-line health care workers like Brown and retail workers like Murray, faced enormous challenges because of Covid Many health care companies also took hits last year.

Hospitals' profits, for example, were hurt when some state governments temporarily banned moneymaking elective procedures to keep beds available for pandemic patients. That's because the compensation committee of the HCA board decided to exclude from its pay computation the financial results from two months when the bans had a severe effect. By essentially moving the goalposts on the pay calculation, the HCA compensation committee made it easier for Hazen and other top executives to use a new profit measure that excluded months when profits were adversely affected.

As a result, HCA executives received more incentive pay than they otherwise would have, the filings show. Had the goalposts not been moved, the filings show, the company's performance would have cleared the threshold by only 44 percent, resulting in far lower incentive pay. The compensation committee of HCA's board said in the filing that it excluded the two months of performance because the pre-Covid earnings targets were no longer appropriate in the pandemic, "which was outside of management's control.

According to the filing, the executives wanted to "keep them safe and keep them employed. Dennis, a former executive at Genesco Inc. Halliday Jr. Through the HCA spokesman, all three declined interview requests. The spokesman also declined to answer questions about why HCA moved the pay goalposts. The company's proxy says it also reduced executives' payout opportunities for the months most severely affected by the Covid pandemic.

Moving goalposts is a big concern in executive pay, said Nell Minow, a corporate governance expert at ValueEdge Advisors, which helps institutional investors engage with the companies whose shares they own.

But he says the previous system "broke down" when executive pay became connected with share prices, and "asset-based rewards" took off under the prevailing neoliberalism. Pepper says the underlying logic was to pay the CEO according to a company's financial performance, since they were the most important factor of success. So, on top of basic salaries, CEOs were given performance-related bonuses and stock options allowing them to buy company shares for a set price.

Ocado declined request for comment. At the same time, the proportion of UK businesses owned by individuals dropped precipitously. Shareholders grew in power, and their demand for booming stock prices led to booming pay packets for CEOs — in turn signed off by boards of directors eager to please their investors.

Robin Ferracone, CEO of Farient Advisors, an international executive-pay consultancy, agrees with these "price-driven" salaries. However, in reality, the system of calculating CEO remuneration is more complicated. Companies rely on compensation committees, mostly made up of board members and executives from other companies that meet once a year. Besides the more traditional measures of past experience and performance, committees use benchmarking as a key part of the process — working out how the CEO's compensation will compare to those at similar companies, according to Steven Clifford, a former CEO and author of The CEO Pay Machine.

Often the sum will be in the 50th, 75th or 90th percentile, therefore constantly maintaining or increasing pay, he writes. A study in in the Journal of Financial Economics concluded this system of compensation committees is accelerating pay inflation "because such peer companies enable justification of the high level of their CEO pay". Bonuses are then agreed as a way to measure performance, either increasing based on financial measures or provided in sum if specific goals are met.

As shareholders have grown in power, their demand for high share prices has nudged up CEO pay Credit: Alamy. Both the process for base pay and for bonuses are seen by workers' representatives as problematic because boards, not wanting to upset the leader of their company who could leave or fire them, therefore push up pay.

Janet Williamson, senior policy officer at the UK's Trades Union Congress, argues the system of compensation committees, who often report directly to the CEO, lacks impartiality and should be reformed. In fact, Pepper argues the empirical evidence shows the strongest correlation between pay and company financial measures is not financial performance, but rather the size of companies — there is simply more money to spend.

Whether CEO pay is justified remains subject to fierce debate. On one side, free-market economists argue high executive pay is justified if it aligns with the interests of executives and shareholders.