Our Insights

Using Long-Term Incentives as a Strategic Driver

A clear and differentiated business strategy is critical to a company’s long-term success. The same is true for a well differentiated strategy for long-term incentive compensation. A tailored and thoughtful approach to long-term incentives can be a valuable management tool—reinforcing for both executives and company stakeholders the company’s key performance imperatives. Read the entire article (PDF) written by Seamus O'Toole and Blair Jones. Read more

Fostering and Rewarding Bright Ideas

It’s rare these days to scan a business journal or newspaper without reading mention of innovation as a, if not the, key success factor for businesses today. Innovation is so top-of-mind for today’s business leaders that it ranks as one of the top five CEO challenges in 2014 — along with human capital, customer relationships, operational excellence, and corporate brand and reputation — according to “The Conference Board CEO Challenge 2014: People and Performance.” Read the entire article by Barry Sullivan and Rosemary Newman (PDF) as it appeared in the August 2014 issue of Workspan. Read more

New Data on Clawback Policies

A recent PWC study of 100 large companies revealed that the two most common clawback policy triggers are misconduct and restatement of financials—which are disclosed in 84% and 68% of policies, respectively. Risk management, performance, and compliance violations were the most seldom used triggers, with risk management predominantly used by financial companies. Many companies initially adjusted their clawback guidelines following the Sarbanes-Oxley Act of 2002, and more are predicted to do so following the finalization of the Dodd-Frank clawback rule, expected later this year. Clawback Policies Vary by Company, Industry: PwC (WSJ CFO Journal (subscription required)) Executive Compensation: Clawbacks—2013 Proxy Disclosure Study (PricewaterhouseCoopers LLP) Read more

Don’t Take Favorable Votes at Face Value

Since the 2010 Dodd Frank Act gave shareholders of public companies the right to an advisory vote on executive compensation practices, we’ve been tracking the results through our say-on-pay database and reading between the lines. As companies begin to approach the 4th year on say-on-pay, it’s important they learn from the lessons of the past three seasons: Don’t be lulled into a false sense of security by the largely favorable votes. Read more

Aiming For Best-in-Class Decision Making

Best-in-class decision-making is what every compensation committee wants. How do committee members move themselves from feeling overwhelmed by the tactical to making the tactical seem routine? This article by Barry Sullivan explores specific processes compensation committees can utilize to foster best-in-class decision-making. Read more