Our Insights

Advancing the Dialogue: CEO Sign-On Packages: Is There Such a Thing as Too Much?

One of the most important – and highly publicized – decisions a Board makes is identifying and hiring the company’s CEO. Given the critical nature of this decision, Boards often make major investments in signing packages for new CEO. This article analyzes CEO sign-on packages, their impacts on stock price and Say on Pay voting, and key principles for designing an optimal deal. Read the entire article (PDF) written by Greg Arnold, Ross Brondfield and Julie Archer. Read more

Board Pay Trends

Semler Brossy Consulting Group Managing Principal Blair N. Jones analyzes emerging director pay trends. Read more

CEO Sign-On Practices, Risks

One of the most important decisions a board makes is identifying and hiring the company’s CEO. Given the critical nature of this decision, boards often make major investments in signing packages for new CEOs. These signing packages serve multiple purposes: helping secure new talent to run the company, providing “staking” grants to align the new CEO with shareholders, and, in some cases, buying out existing equity packages. This article by Greg Arnold originally appeared in NACD Directorship. Read more

Four Principles Guiding Discretion

All businesses are inherently uncertain, which complicates business planning and makes target-setting and year-end decision-making for incentives a challenging endeavor. In these times of volatile national and global markets, the calls for adjustments to formulaic awards are becoming increasingly pervasive. Add to these market factor a variety of unforeseen events both man-made: the political gridlock in Washington and the resulting fiscal cliff, sequestration etc. and natural: the devastating and disrupting effects on businesses of Super Storm Sandy last year and the Mississippi flooding the year before — and the challenges facing compensation committees with respect to the application of discretion are truly daunting. Read more

Three Questions to Pull Back the Curtain on Discretionary Pay

Judgment by directors acting on shareholders’ behalf is a cornerstone of U.S. corporate governance. So why is it so controversial when CEO pay is based on judgment? A more transparent process, with clear expectations and discussions, can focus performance messages and de-mystify the pay decision for all employees in addition to informing shareholders publicly about CEO pay. Read more