The “Next Generation” Compensation Committee

We enjoyed this Semler Brossy piece charting how compensation committees have evolved—and why organizations focused on long-term talent sustainability should be thinking ahead to their “next generation” committee model.

Where It All Began: 

• Historically, compensation committees operated with a relatively defined scope. Broader human capital matters were owned by the CHRO and the CEO.
• As external executive hires failed more often, cost more, and took longer to ramp up, boards began to ask: Are we doing enough to build talent from within?

The Scope Expands: 

• By 2018, committees were rebranding - adding terms like “talent,” “human capital,” or “leadership development” to reflect expanded charters. Pay equity, performance management, culture, and succession planning moved higher up the agenda.

Today’s Mandate: 

• Modern committees are now expected to connect HCM to business strategy. That means asking bigger questions:
  • What skills and roles are mission-critical for the next five years?
  • How do we identify and develop future leaders?
  • Is our performance management system rewarding what matters?
  • Are our pay practices reinforcing our culture?

“Next Gen” Topics:

1. Succession Planning Beyond the C-Suite: Boards want insight into high-potential employees, development pipelines, and how succession strategies translate across mission-critical roles.

2. Performance Management: Committees are digging into how goals cascade across the company to weigh in on leadership effectiveness, culture, and pay equity in a more informed way.

3. Pay Philosophy & Value Proposition: Boards should understand the organization’s employee value proposition and determine if the company has the right mechanisms in place to ensure fairness and transparency.

Getting There: The article outlines a practical “crawl, walk, run” approach, starting with education and data visibility, then moving toward active oversight and strategic contribution.