Companies undergoing financial restructuring face several critical human capital-related issues — which include addressing increased turnover, improving depressed staff motivation, and the need to revise and realign company performance goals and objectives. These issues are often exacerbated by the harsh reality that many existing elements of current total compensation programs, such as annual incentive plans and long-term equity plans, are usually no longer relevant in a distressed financial situation. It is also possible that recent hires or recently promoted executives confront a different compensation opportunity than what they experienced in the recent past, or as outlined to them in the recruitment process, and are at an increased risk of departure at a time when their skills and abilities are most critical for stakeholders.
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