On the 2025 compensation committee agenda

In 2025, the business environment will continue to be challenging, with increasing uncertainty and disruptions impacting companies and their employees. Emerging technologies are rapidly retooling, if not revolutionizing, business and how work gets done; changes to the regulatory environment and economic policies under the second Trump administration may fundamentally impact corporate strategies; the impact of geopolitical tensions (including trade and tariffs) may ripple across industries and workforces; and addressing the evolving expectations of investors, regulators, and employees may call for difficult decisions and trade-offs. Taken together, these and other factors are likely to make the focus on human capital and compensation strategy all the more important in the year ahead.

Drawing on insights from our interactions with directors and business leaders, we highlight five issues to keep in mind as compensation committees consider and carry out their 2025 agendas:

• Ensure that the compensation strategy is optimally designed to retain and motivate talent.
• Remain focused on evolving human capital management (HCM) issues when reviewing the committee’s scope and composition.
• Review any environmental and social metrics in incentive plans and ensure they still support the company’s strategic goals and messaging.
• Monitor proposed and new regulations and their potential impact on compensation strategy, incentive plan design, and disclosure practices.
• Stay abreast of shareholder expectations and concerns.