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Compensation Philosophy & Programs

Browse the latest articles on pay philosophy, including articles on pay prominance, strategic valuation of pay, talent retention methods, framing the compensation discussion and analysis (CD&A) portion of the proxy statement, and non-direct compensation matters such as SERPs and employee benefits.

Pay for performance or pay for results?

For the last few decades, the focus of executive compensation has been to align pay with performance.Nearly every company includes “pay for performance” as a core principle of the executive compensation design, and compensation committees consider managing the pay for performance relationship as one of their primary governance responsibilities. But what exactly does “pay for performance” mean? For most companies, pay for performance has traditionally meant the following: identify key business metrics; set challenging but attainable performance objectives; and deliver pay for achieving those objectives. Read more

Executive Compensation—What Matters Most to Activists?

Executive compensation is a perpetual hot-button topic and one that activist investors frequently use to court shareholder support for their proposals. In a recent BoardVision video, Semler Brossy managing directors Roger Brossy and Blair Jones talk with Ken Bertsch, partner at CamberView Partners, about the following questions. Read more

Goal Setting: Meeting Stakeholder Expectations in an Increasingly Dynamic and Complex World

The perennial challenge of setting meaningful, yet realistic, incentive-plan goals has become ever more difficult in an increasingly complex and rapidly changing business world. Companies now must also accommodate the growing importance of a range of stakeholders. Read more

Staying Ahead of Pay Practices

Public conversations about executive compensation tend to be spurred by the media and other entities that don’t have direct involvement in the creation and implementation of payment programs. The National Association of Corporate Directors’ (NACD) annual Leading Minds of Compensation event sought to hand directors the reins to guide and shape a smart dialogue on sensitive compensation questions. The Grand Hyatt Hotel in New York City was the setting on March 3 for a slate of experts to speak to and answer questions about the latest compensation trends. Read more

How to Set Threshold and Maximum Payouts That Are Tailor-Made For Your Company

Compensation committees sometimes feel challenged by the task of setting targets for annual goals. Not only do they have to address the upside potential and downside risk in the company’s business plan, but also other factors that include external headwinds and tailwinds associated with macroeconomic factors, competitive opportunities and threats, technological disruptions, and regulatory changes. That said, the task of setting annual targets can become quite complex. Read more

Leading Minds of Compensation 2015 Panel Discussion

Earlier this month, Semler Brossy's Barry Sullivan, managing director, was a featured speaker at the NACD Leading Minds of Compensation summit, held on March 3, 2015. NACD's Leading Minds of Compensation program is a forum for engaged compensation committee chairs, members, and directors gather to exchange insights with the nation's top thought leaders.The panel was moderated by Christopher Y. Clark, Publisher of NACD's Directorship Magazine and featured Dayna Harris of Farient Advisors, Janice L. Koors of Pearl Meyer & Partners, Steven Hall of Steven Hall & Partners, Jeff Joyce of Pay Governance LLC, Rose Marie Orens of Compensation Advisory Partners, and Barry Sullivan of Semler Brossy. Read more

5 Principles for Successful Executive Pay Benchmarking

Commentators on executive pay have for years pointed to factors that drive up compensation levels. Some of these factors, such as paying more to take account of unprecedented challenges and global competition, raise no eyebrows. But others, namely peculiarities in the compensation system unrelated to the functioning of executives, come in for fair criticism. Read more

Ask the Experts: What Will be a Hot Topic in Corporate Governance in 2015?

Now is the time for Boards to take a fresh look at their goal setting approach. At the time this was written, the SEC had not provided final rules on the CEO Pay Ratio or clawback requirements. While these topics will be hot in 2015 if final rules are provided, I view goal setting as potentially a more complicated and pressing issue for many Boards. Read more