KPMG Board Leadership Center Advises on 2026 Compensation Committee Agenda
KPMG BLC advises compensation committees to prioritize four items: align pay with long-term strategy, oversee AI’s workforce impact, sharpen shareholder disclosures, and review perquisites for security.
KPMG Board Leadership Center (BLC) published an advisory note titled “On the 2026 compensation committee agenda” (KPMG LLP, Jan. 15, 2026) aimed at compensation committee members, general counsel, CHROs and HR leaders. Drawing on its director and business-leader interactions, the BLC highlights four priorities compensation committees should carry into 2026.
1. Ensure compensation structures support long-term strategy and talent retention while continuing to consider investor expectations.
KPMG’s advisory places pay design squarely in service of strategy and retention, urging committees to reframe packages to reinforce multi-year objectives rather than short-term results. The BLC’s language explicitly links compensation structures to long-term strategy and talent retention while noting investor expectations remain a continuing consideration; committees should expect to balance internal talent signals with external scrutiny from shareholders and proxy advisors. That balancing act will require compensation committees to interrogate performance periods, vesting schedules and incentive levers against strategic milestones rather than relying solely on annual metrics.
2. Continue to focus on oversight of broader HCM matters, including the impact of the company’s integration of AI on the workforce.
The advisory notes that “compensation committees continue to broaden their purview beyond traditional executive compensation issues,” and specifically directs committees to “continue to focus on oversight of broader HCM matters, including the impact of the company’s integration of AI on the workforce.” Committees should treat AI not as a technology-only issue but as a workforce and pay-related risk and opportunity, assessing likely headcount shifts, reskilling needs, incentive alignment for managers deploying AI, and implications for retention of scarce technical talent. The BLC also ties this expanded remit to the pandemic-era evolution of board oversight, observing that many committees added workforce and well‑being issues after COVID‑19 elevated employee health, mental health and composition concerns.
3. Remain committed to shareholder engagement and ensure compensation-related disclosures are clear and comprehensive.
KPMG’s note instructs committees to “remain committed to shareholder engagement and ensure compensation-related disclosures are clear and comprehensive.” That direction anticipates continued investor focus on pay-for-performance, disclosure clarity and the narrative tying compensation decisions to strategy and risk management. Compensation committees should plan proactive engagement cycles with key investors and prepare disclosure drafts that show how pay structures reflect long-term objectives, human capital strategies (including AI impacts), and risk controls — recognizing that the BLC’s guidance is advisory and does not prescribe specific formats or regulatory text.
4. Review perquisites in light of increasing security concerns.
The advisory makes a succinct but pointed recommendation to “review perquisites in light of increasing security concerns.” For many boards this will mean re-evaluating executive travel, residential security benefits, cyber-protection for executives’ personal devices, and other perks that carry both safety and reputational risk. The BLC does not enumerate specific perquisites, so committees should inventory current offerings, assess exposure under plausible security scenarios, and determine which items warrant policy change, additional controls, or clearer disclosure to stakeholders.
Why these priorities matter now The BLC frames these four priorities as part of a wider oversight environment shaped by technological change and geopolitical disruption. Its LinkedIn promotion, posted by Claudia H. Allen, positions the compensation note within an annual “On the agenda” series that calls out oversight of AI, data governance, cybersecurity, refining risk oversight, and the board‑CEO relationship as concurrent priorities directors must manage. The advisory underscores that “carrying out the board’s 2026 agenda will be a significant oversight challenge,” signaling that compensation committees will need to coordinate closely with audit, risk and nominating/governance committees to avoid gaps or duplicative oversight.
Governance and alignment actions the BLC emphasizes The advisory returns repeatedly to alignment and governance mechanics. It states that “essential to effectively managing a company’s risks is maintaining critical alignment - of strategy, goals, risks, internal controls, performance metrics and incentives.” To operationalize that, the BLC recommends a set of governance actions: ensure the “right board leadership, composition, and committee structure,” provide “ongoing director education,” and carry out “rigorous board, committee, and individual director evaluations.” These items are presented as prerequisites: without appropriate board composition—some boards have added directors with human resources experience—the expanded HCM remit will be difficult to oversee effectively.
- Map incentives to multi-year strategic milestones and identify where short-term metrics create misalignment with longer-term objectives.
- Integrate AI impact assessments into human capital reviews: ask management for workforce scenarios, reskilling plans, and compensation implications tied to automation risks.
- Update investor outreach playbooks to include narrative flows linking pay, risk controls and HCM strategies; plan for enhanced disclosure drafts well before proxy season.
- Conduct a perquisites inventory and security-risk assessment focused on executive safety and reputational exposures, then adjust policies and disclosures accordingly.
Practical next steps for compensation committees
Where the advisory stops — and what committees should test further KPMG’s note is deliberate in scope: it provides high‑level direction and explicit priorities but offers no prescriptive metrics, timelines or disclosure templates. The research extracts make clear that no specific compensation figures, executive names, or prescriptive checklists appear in the advisory. Committees should therefore treat the BLC guidance as a framework for questions to pose to management and advisers rather than a turnkey compliance checklist. Follow-ups that are likely necessary include requesting quantitative scenarios around AI’s workforce impact, security-cost estimates tied to perquisites, and draft disclosure language for shareholder engagement.
Context and publication details The compensation committee advisory was released by the KPMG Board Leadership Center / KPMG LLP on January 15, 2026 and is presented as part of KPMG’s annual “On the agenda” messages for directors. The document references the prior “On the 2025 compensation committee agenda” (KPMG Board Leadership Center, ‘On the 2025 compensation committee agenda,’ p. 4) and sits alongside companion notes on board and audit committee agendas highlighted in KPMG’s LinkedIn promotion. Two partners listed in the BLC contact block are Laurent Carême, Partner, Audit Private Equity, KPMG Luxembourg, and Giovanna Giardina, Partner, Advisory, KPMG Luxembourg; correspondence is routed to lu-fmboardleadershipcenter@kpmg.lu and readers are directed to “Learn more at kpmg.lu.”
Legal and reference details © 2026 KPMG LLP, a Delaware limited liability partnership, and its subsidiaries are part of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. Identifier: USCS035395-5C. A Luxembourg regional attribution also appears in the advisory materials: “© 2026 KPMG Luxembourg refers to one or more firms registered in the Grand Duchy of Luxembourg and part of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.”
Conclusion KPMG BLC’s note sets a compact, practical agenda for compensation committees: align pay with long-term strategy, widen HCM oversight to include AI, keep shareholder engagement and disclosure clear, and reappraise perquisites for security. The guidance recognizes the heavier oversight burden facing boards in 2026 and stresses governance fundamentals—composition, education and evaluations—as the means to meet it. For committees, the work ahead is less about novel mandates than about translating these high‑level priorities into measurable oversight actions and clear, investor-ready disclosures.
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