Using Compensation as a Tool to Weather Real Estate Industry Cycles

Managing Director Jon Boba discusses leadership and executive compensation in today’s seniors housing market.

Q. Jon, you have been in the seniors housing market for some time and know real estate overall is cyclical, but we are facing very unique circumstances now. What actions are you seeing companies take to keep their leadership teams focused?

A: This is a time when we all are becoming more human capital-oriented. Clients have multiple concerns, but from a business strategy standpoint, keeping the executive team intact and focused on the urgent issues of the moment without losing sight of the company’s long-range plans can be tough. The right mix of short- and long-term incentives can help in this regard, and also offers opportunities to build in executive retention.

Q. In this era of uncertainty, do organizations really need to be concerned about turnover?

A: Absolutely and from a couple of perspectives. One, our seniors housing market is particularly intense during this crisis, which could cause some to look to other industries, many of which have been only neutrally or even positively affected by the pandemic. Second, this experience has helped highlight those who have exceptional leadership qualities and they are likely to be recruited.

Now more than ever, companies need to attend to talent management, leadership development, succession planning, and executive compensation—all of which work best when thoughtfully integrated. Pearl Meyer is uniquely positioned to help companies outline the approach that will work best for their circumstances and long-term business strategy.