Broking giant Willis Towers Watson has altered its 2020 short-term incentive (STI) compensation programme for executive officers of the Irish-domiciled enterprise, without changing the general principles applicable to the STI plan for the company’s wider employee base.
In a Form 8-K filing with the US Securities and Exchange Commission, Willis Towers Watson noted: “These changes to the executive officer STI programme’s methodology were made so that the overall funding percentage for that STI programme (as a percentage of target) would be closer to the funding percentage for short-term incentive awards made to a broader group of employees eligible for such awards and so that executive officers from different business units would be more closely aligned, thereby promoting an even more unifying, team mindset that is intended to help the company manage the economic uncertainty created by the COVID-19 pandemic.”
Under last year’s STI programme, each executive officer was eligible to receive an annual target cash-payable award expressed as a percentage of his or her base salary, with the performance goals weighted based upon the recipient’s responsibilities.
Willis Towers Watson broke down the 2019 scheme as follows: “The CEO’s award was based (i) 80% upon enterprise financial results and (ii) 20% upon individual objectives. The awards for those officers leading a business segment or business geography were based (i) 20% upon enterprise financial results, (ii) 60% upon the business segment or geography performance, as relevant, and (iii) 20% upon individual objectives.
“The awards for those officers leading a corporate function were based (i) 60% upon enterprise financial results, (ii) 20% upon corporate function performance, and (iii) 20% upon individual objectives. Financial performance metrics for the 2019 STI programme awards were based on total adjusted revenues and adjusted operating income on an enterprise and business segment/geography level.”
For 2020, all Willis Towers Watson executive officers will continue to be eligible to receive an annual target award expressed as a percentage of base salary, ranging from 80% to 200%, but the awards will be weighted 80% upon enterprise financial results and 20% upon individual objectives.
“This change is intended to incentivise collaboration among the executive officers,” stated the firm, which maintains its headquarters in London. “The attainment level for the portion of the award that is based on enterprise financial performance will be determined based on the same percentage of target that the broad-based bonus pool for employees is funded.”