Resource Library Insights

The famous line from the movie "Jerry Maguire" rarely rings true today. Based on years of consulting to hundreds of companies, Semler Brossy has concluded that a company's ability to get and top talent takes far more than money.

As the dust settles on the 2017 proxy season, shareholders have once again ratcheted up their demands for broader corporate accountability.

In a recent Harvard Business Review article, Graham Kenny posits that nonfinancial measures should be included alongside financial measures in incentive plans.

Despite conflicting messages about climate change from U.S. government leaders, sustainability is getting more and more attention at American companies.

Innovation has long been critical to a company's sustained success. Yet many companies fail to innovate meaningfully and consistently" and compensation programs may be partly to blame for many firms' failures.

Many companies have a one-size-fits-all mindset toward metrics, which makes it hard to use that judgment when allocating resources from the top.

History suggests that many industries periodically reach inflection points, where factors other than profits, returns, and share price really matter. They generally occur when the business case for major change becomes clear and cannot be ignored. It's at these points where compensation can help signal change.

In recent years, no subject in executive compensation has gotten greater focus than the shift toward formulaic, performance-based incentive plans. The advent of annual say on pay, coupled with the increasing attention of institutional investors and proxy advisers, has accelerated this trend and now made this practice the norm. The focus has thus changed to ensuring that the goals underlying such programs are sufficiently rigorous and robust.

Many leaders in the business, academic, and investment communities have been lamenting corporations' increasingly short-term focus.

To hear long-term investors tell it, company executives have embraced short-term thinking like never before. Two obvious pieces of evidence: The use of earnings for share buybacks that cost more than they're worth, and dividend increases that divert cash from long-term investment.

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.

Seymour Burchman and Blair Jones contributed a chapter to the newly released sixth edition of the compensation handbook, "The Compensation Handbook, Sixth Edition: A State-of-the-Art Guide to Compensation Strategy and Design," published by McGraw Hill. The most relied-on guide in the industry" now with strategic insight for using compensation strategies and practices to create competitive business advantage.

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.