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Finalizing 2008 and Setting 2009 Executive Compensation: A Real-time Discussion of Critical Issues

Many companies, Boards and Compensation Committees are faced with important decisions in determining annual bonus and long term incentive compensation for performance periods ended in 2008 and setting performance periods and goals for periods beginning in 2009. The 2008 recession, current volatile and highly-charged economic and political environment, and poor visibility into whatever else 2009 might bring make this year's compensation setting season more challenging than ever. Register to View Archived Webcast >> Download Webcast Slides >> Read more

Long-Term Performance Plans: Overcoming Design Challenges

Companies are facing increasing pressure from shareholders and regulatory mandates to consider compensation vehicles that reward long-term performance. The success of these programs requires identifying the right metrics and establishing suitable goals. This article, written by Seymour Burchman and Blair Jones, provides four approaches to goal setting for performance-based pay programs. Read more

Navigating the Storm: Compensation Committee Best Practices for Today’s Environment

“Storm conditions” on the executive compensation front make it particularly important for a company’s Board to be proactive and make decisions from a position of strength. To explore what Boards, Compensation Committees, and their advisors are thinking and doing, Agenda recently hosted a roundtable discussion by a select panel of Board members and compensation advisors. Blair Jones, a Semler Brossy Managing Principal, participated on the panel. The discussion (captured in the report, “Navigating the Storm”) focused on compensation philosophy and the application of best practices – particularly timely, given the press spotlight coinciding with significant regulatory, legislative, and economic pressures. Effective navigation starts with a compensation philosophy laying out key principles as a foundation for setting goals and rewards and taking necessary actions to ensure the creation and protection of shareholder value. Actions driven by a set of shared principles, coupled with open lines of communication, will serve a board well – ensuring it can proactively and effectively address problems and take action with conviction, appropriately balancing and responding to internal and external pressures. Read more

Four Trends in Executive Compensation

Increased scrutiny of executive compensation has led a majority of companies to revamp their compensation programs, with many emphasizing long-term performance plans to link pay and performance. This examination of four trends in long-term plans explores key considerations to avoid a well intentioned plan with unintended consequences. Read more

Compensation Discussion and Analysis: Lessons Learned

CD&A or exposé? By bringing together all components of executive compensation, the CD&A may give the compensation committee its first look at the scope of the program. A sound program presents a compelling case to investors; a problematic program will raise red flags. Lessons from the first year of CD&A development can be the springboard to diagnose issues, foster dialogue and improve executive compensation design. To support the interests of all stakeholders, executive pay must be grounded in a solid compensation strategy, balance cost with value, truly drive and reward business results, and compel good governance. Read the entire article written by Seymour Burchman, Blair Jones and Doug Tormey as it appeared in Workspan. Read more

CEO Pay: A New Way to Judge the Numbers

Comparing the compensation and financial picture of three actual companies illustrates how three “tests” can help companies get a handle on the reasonableness of CEO pay. The tests check for correlation between pay and performance, value sharing, and peer alignment. The analyses provide a compelling story about the aspects of design that contribute to an appropriate alignment of pay and performance. Read the entire article (PDF) written by Seymour Burchman and Blair Jones. Read more

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