Our Insights

Comparing Apples to Apples – Ensuring Integrity in Your Compensation Peer Group

The media and activist groups often point to company peer groups as a contributor to excessive executive pay. Shareholders deserve a compelling rationale as to why specific companies are considered peers and for what purpose, e.g., pay comparison, performance comparator, or models for program design? Compensation committees can follow four guidelines to help ensure their peer group represents a reasonable gauge for assessing the competitiveness of company performance and executive rewards. Read the entire article written by Blair Jones, Roger Brossy and Chip Thomas, as it appeared in Workspan. Read more

A New Day for Executive Compensation

Following popular trends in compensation design can lead a company in a very wrong direction. Different business models dictate different approaches, both at the corporate and business unit levels. This two-part article uses case studies to illustrate the importance of addressing executive compensation strategically. A strategic approach considers a company’s business situation and market characteristics, talent requirements and desired performance and rewards philosophy. Read more

Executive SERPs

The use of a performance-based alternative using RSUs has (i) greater alignment with stock performance/shareholder return, (ii) considerably lower accounting cost, and (iii) the potential for upside. In many cases, this alternative will provide a more shareholder friendly way to offer supplemental retirement benefits to executives. Read the entire article (PDF) written by Seymour Burchman and Blair Jones. Read more

Getting Post-M&A Executive Compensation Right

The success of a merger or acquisition transaction rests in large part on the strength and accuracy of the pre-M&A legwork. Executive compensation helps signal what will be important in the new organization and lay some groundwork of how to get there. Successful design and execution of a post-transaction compensation program requires a holistic design approach. Read more

Executive Compensation as a Support for a Growth Strategy

Compensation can be critical to building and sustaining motivation and commitment, as well as ensuring the required talent is available and focusing in the right direction. Compensation can help a company attract the right talent to the key roles responsible for driving top-line growth. In addition, with the right leadership in place, incentive plan design can reinforce the growth strategies through performance measures and goals that influence corporate and/or business unit top-line growth. Read more

Follow With Caution

Performance-based compensation for a company’s directors can threaten board objectivity and create possible conflicts of interest. Yet with the right measures and goals, a company can avoid sub-optimization and keep directors aligned with shareholder interests. The best solution may lie in significant equity ownership tied to board tenure. Read more

A Partnership Approach to Executive Compensation

The new governance environment has changed the dynamics between management and compensation committee members. An optimal partnership between these two parties can improve the business impact of a company’s executive compensation program. Such a partnership can also reassure both parties that the program’s objectives and implementation are as unassailable as possible in the eyes of the shareholders and the outside world. In this article, we outline five steps that create an optimum approach to management/committee collaboration. Read more

Four Tests for Executive Compensation

Compensation committees are bombarded with so much information these days, they need some analytics to make sense of it all. Here we explore four tests that will help them understand the elements of their executive compensation program and how they work together. Read more