The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Fri, 03 Jul 2026 11:31:03 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Short-Term Incentive Metrics: Increasing Metric Complexity and a Pay-for-Performance Disconnect – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Short-Term Incentive Metrics: Increasing Metric Complexity and a Pay-for-Performance Disconnect https://corpgov.law.harvard.edu/2026/07/02/short-term-incentive-metrics-increasing-metric-complexity-and-a-pay-for-performance-disconnect/?utm_source=rss&utm_medium=rss&utm_campaign=short-term-incentive-metrics-increasing-metric-complexity-and-a-pay-for-performance-disconnect https://corpgov.law.harvard.edu/2026/07/02/short-term-incentive-metrics-increasing-metric-complexity-and-a-pay-for-performance-disconnect/#respond Thu, 02 Jul 2026 11:30:37 +0000 https://corpgov.law.harvard.edu/?p=182085?d=20260701151611EDT Posted by Subodh Mishra, ISS STOXX, on Thursday, July 2, 2026
Editor's Note:

Subodh Mishra is the Global Head of Communications at ISS STOXX. This post is based on an ISS-Corporate memorandum by Will Harrington and Sean Reilly, Compensation and Governance Advisory, at ISS-Corporate.

Key takeaway

  • Increases in the number of metrics used in short-term CEO incentive plans correspond with a
    notable increase in payout levels across the S&P 1500
  • Above-median payouts do not clearly correspond to above-median performance, as measured by annual TSR
  • The Pandemic inspired a shift in metric utilization with a higher number of short-term incentive
    plans utilizing a greater number of incentive metrics after 2020. The level has remained elevated
    even after the impact of the Pandemic decreased
  • Use of a diversified set of short-term incentive metrics raises key questions for compensation
    committees over executive retention and performance incentivization
  • Use of non-financial metrics, often difficult for those outside a company to assess, has also
    increased since the Pandemic

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