Madison Square Garden Sports Corp. has changed the targets executives must meet to collect bonuses due to its spinoff and the pandemic

“Shareholders oppose ‘one-way executive pay-for-performance’: When performance is good, everyone gets paid well, and when performance is bad, boards adjust awards to protect the downside,” Semler Brossy wrote in a report last month. “They are appropriately wary of that philosophy taking hold.

There are signs that philosophy is taking hold. Some companies suffering big drops in earnings or revenue have decided to swap out those metrics for more favorable ones when tallying up bonuses.

For example, Nike’s board decided to stop basing certain payouts on earnings or revenue after profits fell by 37% last fiscal year. It instead will award those payouts on how well the company’s stock price does over three years. The shift is intended to “ensure sustained engagement and drive key business results during a dynamic and unprecedented period,” the apparel giant said in a regulatory filing.

Others are lowering bonuses to conserve cash.

Hess, the Manhattan-based energy company, changed its bonus plan because turmoil in the oil market led to an adjusted first-half net loss of a half billion dollars. Hess reduced the maximum payout allowed from 200% of “target” to 50%. It said the revised plan would continue to serve as a “performance driver” with “rigorous but obtainable goals.”

MSG Sports said its bonus plan is based on executives reaching internal goals for revenue and adjusted operating income. The company said its board “seeks to make target goals ambitious, requiring meaningful growth over the performance period, while threshold goals are expected to be achievable.”

MSG Sports reported negative revenue of $7 million and a $79 million loss from continuing operations for the quarter ending June 30. That was down from positive revenue of $68 million and a $37 million loss from continuing operations in the year-earlier period. Last month the company laid off 53 people, according to a filing with the state, or about 15% of its staff.

One goal, MSG Sports officials say, is to restore the lost jobs.

“As our business returns to normal operations, we would look to bring back many of these positions,” Chief Executive Andrew Lustgarten said.

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