Resource Library Articles

No director wants to see his or her company cited in the newspaper for executivepay transgressions. Especially not on the front page of The Wall Street Journal. And especially when the reporter suggests stock sales from an executive-pay plan hurt shareholders. But that's what happened on Nov. 27, in what might be called the Thanksgiving

We outline Top 5 lessons learned from our experience engaging with shareholders over the last year.

The evidence to date does not suggest a significant shift to performance-contingent stock options, despite the pressure for companies to enhance the appearance of having "performance-based" pay. Yet there are circumstances where this vehicle may make good sense, and in this article we outline the benefits and risks of performance options, and when they might be considered as part of an overall pay strategy.

Many executive compensation observers have suggested that performance options — standard stock options with one or more additional performance conditions — will become a more significant and prevalent long-term incentive vehicle over the next several years. This viewpoint is driven by the perspective espoused by proxy advisors (e.g., ISS and Glass Lewis) and some shareholders […]

Ownership guidelines have become the standard approach for public companies to demonstrate a commitment to executive ownership. In this article we explore the benefits of an alternative approach " holding requirements for vested shares " which can be a more meaningful and practical approach to encourage and demonstrate ownership. Read the entire article (PDF) written by John Borneman.

Many companies are incorporating relative total shareholder returns into incentive plan designs. This article explores two fundamental, but little discussed, issues with all relative total shareholder return metrics that need to be taken into consideration before addressing more detailed design concerns. Read the entire article (PDF) written by Todd Sirras and Barry Sullivan as it appeared in WorkSpan.

The latest pressure from proxy advisory firms and shareholder activists emphasizes mandatory holding periods even after equity pay is vested, with some calling for the forced holding of stock into retirement.

This interview with Blair Jones provides advice on effective shareholder communications, including what it should focus on, depth and timing.

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.

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.

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?

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.

The success of a merger or acquisition transaction rests in large part on the strength and accuracy of the pre-M&A legwork.