HRPI Roundtable Discussion

The Human Resources Policy Institute hosted a Spring 2020 Virtual Roundtable Discussion via Zoom on May 7. Professor Fred Foulkes welcomed everyone to the first ever virtual HRPI Roundtable Discussion with a record number of participants and wished everyone continued good health and wellness. He shared that Lisa Buckingham will be the new HRPI Steering Committee chair, taking over from Daniel Marsili. The Roundtable addressed two key topics: Returning to Work(place) and Executive Compensation.

Focusing first on Return to Work(place), Tom Fleming, Vice President, Human Resources, Cloud Platform, IBM shared how IBM has reacted to the COVID-19 pandemic. Much of the world’s infrastructure runs on IBM systems, from healthcare to finance to airlines and telecom. Ninety-seven percent of IBM staff is currently working from home. This required special attention to the challenges of working from home while balancing family duties, including, caregiving, home-schooling and elder care. In response, IBM has been providing extra training around leading with empathy, effective team meetings, and increasing awareness and sensitivity to mental health.

Mr. Fleming also shared IBM’s four-phase approach for returning to work. Phase 0: Identify essential employees in office and client sites (~1%). Phase 1: As curves flatten and governments begin to lift stay-at-home orders, IBM will be compliant with government mandates. In this phase, IBM expects to have approximately 20% of employees returning to the workplace. To prioritize who those 20% are, IBM will determine where they are most likely to see material improvements in employee productivity following a return to workplace. Phase 2: Following evidence of availability of testing and contact tracing, IBM will increase return to workplace to approximately 50% of the workforce. Phase 3: Upon availability of widespread testing, tracing, and available treatments, IBM will move to 90-100% return to workplace.

Carolyn Wiesenhahn, Senior Vice President, Human Resources, CVS shared her company’s response. At CVS store locations, pharmacies, and other direct care sites, most employees have continued to work onsite, while almost all corporate office employees have been working from home. CVS started discussions about a return to workplace for corporate facility employees by thinking about managing capacity and maintaining social distancing, with a strong focus on protecting the health and safety of our colleagues. She shared that CVS has protocols similar to IBM regarding return to work (including requiring masks, symptom checks, and enforced physical distancing), but that the company is also focusing intensely on how to help employees better use virtual tools and communicate more effectively. The company hopes to leverage the positive strengths they have built through this crisis and take advantage of this opportunity to think more about the future of how work will get done.

Sean Sullivan, Chief Human Resources Officer, SHRM shared that the organization has been working to track global developments. He highlighted three considerations: First, he discussed the importance of helping leaders: Recognizing that no one has a playbook here, HR leaders need to work with the executives who are essentially making things up along the way. He noted that communicating to employees is important. As decisions are being made, it is tremendously valuable to continue to emphasize to employees that this is a very fluid situation. Actions taken are not a permanent condition and HR leaders should be expressing gratitude and appreciation for their continued flexibility. Finally, he discussed the decision process for returning to the workplace. As organizations start bringing people back to the workplace, Mr. Sullivan encouraged HR executives to think clearly about the methodology behind this decision-making.

Regarding Executive Compensation, Charlie Tharp, Professor of the Practice, Boston University, shared his perspective on executive compensation and planning. He noted that the situation was still at the “wait and see” stage and that it is too early to make any major decisions regarding changes to executive compensation and planning. As companies begin to address planning, he suggested several key questions to consider including: What awards and metrics should be adjusted? By how much and when? How will treatment of executive compensation compare to treatment of other employees? How will investors and other stakeholders view any actions taken? How will these actions be explained in required filings and disclosures?

As companies adapt to the conditions caused by the pandemic he sees companies focusing their response on the following key areas: Salaries (short-term and long-term incentives),stock buybacks and dividends, share pools, dilution, and stock price volatility, conserving cash and, for a subset of companies intending to receive federal aid, dealing with legislative restrictions

His presentation also explored the following key areas: Challenges presented by low stock prices, CARES Act provisions, scenarios for compensation components and public company actions in reducing executive pay

Following the presentations and using the chat function, there was time for questions and discussion. Concluding the meeting, Professor Foulkes thanked everyone for participating. The group agreed that such meetings would be useful in the future.