Editor’s Note: Jeremy Goldstein is a partner at Wachtell, Lipton, Rosen & Katz active in the firm's executive compensation and corporate governance practices. This post is based on a Wachtell Lipton firm memorandum by Mr. Goldstein, Michael J. Segal, Jeannemarie O'Brien, Adam J. Shapiro and David E. Kahan.
For many public companies, the new year marks the beginning of compensation season. Setting pay and targets for the new year, determining achievement of performance objectives for the past year and preparing the annual proxy statement contribute to a busy first quarter for compensation committees and management teams working with them. In 2011, companies will undertake these activities in a fluid environment, with executive compensation continuing to receive significant attention from shareholder activists, the government and the media. As companies prepare for the upcoming compensation season, they should consider the following items.