Executive compensation has long been a hot-button issue for investors. Throughout 2021, the Covid-19 pandemic and the economic downturn will focus attention on the pay of executives in struggling companies. Furthermore, companies seeking bankruptcy relief will probably encounter heightened scrutiny of their executive compensation requests.
Companies facing bankruptcy may encounter restrictions on incentive bonuses and other forms of compensation. Issuers might also expect adverse “say on pay” advisory votes from shareholders, and even campaigns from activist investors if compensation is perceived as misaligned with performance. In addition, under the federal securities laws, public companies may claw back executive compensation in ...