Our Insights

Top 5 Lessons from Say on Pay and Shareholder Engagement

Say on Pay has ushered in a new era of shareholder engagement on executive compensation. In the past, centralized proxy voting and governance policy-making groups at institutional shareholders have not had a channel to directly influence executive pay practices, despite growing market concerns. With Say on Pay, they now have an explicit voice. In response, HR professionals accountable for executive pay issues must develop a new set of tools and capabilities. Specifically, direct outreach and engagement with shareholders has become a key component of governance. In this article, we outline Top 5 lessons learned from our experience engaging with shareholders over the last year. Read more

Advancing the Dialogue: Breaking The Link Between Budgets And Pay

Companies typically use the annual budgeting process to set performance goals for annual and long-term incentives. This article suggests eliminating budgets as the starting point for the goal-setting process and offers four alternative approaches for consideration. Read the entire article (PDF) written by Seymour Burchman. Read more

Advancing the Dialogue: When Do Performance Options Make Sense?

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. Read the entire article (PDF) written by Seymour Burchman and Blair Jones. Read more

Advancing the Dialogue: Can Corporate Officers Sell Stock?

Conventional wisdom suggests that executives should always hold on to company stock earned through incentive plans. However, recent research conducted by Semler Brossy indicates that stock sales are relatively common practice for long-serving executives, and in this article we offer a principled approach which encourages appropriate diversification over time. Read the entire article (PDF) written by Roger Brossy and Ross Brondfield. Read more

Advancing the Dialogue: The Benefits of Holding Requirements for Equity Incentive Plans

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. Read more

The Problem With Relative Total Shareholder Returns

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. Read more