In a Hot Job Market, Companies Hand Out Big Awards to Retain Key Executives

Big U.S. companies are doling out one-time awards to executives in an effort to retain high-performing leaders amid record employee turnover and reward them for managing through a couple tough years.

Retention awards, provided in addition to standard compensation plans, are a focus of companies’ pay disclosures this year as concerns about the tight labor market are extending to the C-suite. Leadership teams want to keep their best people on board as companies battle high inflation, supply-chain disruptions and other challenges.

Companies including Coca-Cola Co., Hewlett Packard Enterprise Co. and Tyson Foods Inc. during the 2021 fiscal year provided supplemental awards to senior executives, according to proxy filings. The awards, mostly made in the form of stock and often worth millions of dollars, are designed to motivate executives and encourage top talent to stay in their jobs. Some awards also replaced compensation that executives didn’t receive due to the economic shock caused by the pandemic.

…C-suite departures declined last year while workers across the country quit their jobs at record levels. Within the S&P 500, 9% of all named executive officers—the top leaders at a company—left their companies last year, according to MyLogIQ, a data provider. That’s down from 10% in 2020, during the first year of the pandemic, and 11% in 2019, MyLogIQ said. So far in 2022 through May 6, about 5% of named executive officers at S&P 500 companies announced their departures, according to MyLogIQ.