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Compensation Philosophy & Programs

Browse the latest articles on pay philosophy, including articles on pay prominance, strategic valuation of pay, talent retention methods, framing the compensation discussion and analysis (CD&A) portion of the proxy statement, and non-direct compensation matters such as SERPs and employee benefits.

5 Principles for Successful Executive Pay Benchmarking

Commentators on executive pay have for years pointed to factors that drive up compensation levels. Some of these factors, such as paying more to take account of unprecedented challenges and global competition, raise no eyebrows. But others, namely peculiarities in the compensation system unrelated to the functioning of executives, come in for fair criticism. Read more

Ask the Experts: What Will be a Hot Topic in Corporate Governance in 2015?

Now is the time for Boards to take a fresh look at their goal setting approach. At the time this was written, the SEC had not provided final rules on the CEO Pay Ratio or clawback requirements. While these topics will be hot in 2015 if final rules are provided, I view goal setting as potentially a more complicated and pressing issue for many Boards. Read more

Panel Discussion: Driving the Right Performance and Long-Term Incentives

Blair Jones moderated a panel at the Sept 11-12, 2014, Compensation Committee Boot Camp, jointly hosted by NYSE Governance Services, Corporate Board Member and Equilar. The panel answered questions such as how boards ensure performance measures and how to align goals with long-term incentive pay design. This panel also evaluated the right mix of vehicles and metrics that will drive multi-year corporate performance objectives. Read more

Five Questions Comp Committees Should Ask About Perks

Executive perquisites are one of the most overlooked aspects of the executive employment package during compensation committee meetings, and for good reason, executive compensation consultants contend. Except for outsize perks such as corporate aircraft use, perquisites are typically one of the smallest components of executive pay and thus attract less attention than other elements, such as long-term incentive plans and deferred compensation. 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

Using Pay to Change Culture

Members of the compensation committee play a key role in reinforcing corporate culture change through compensation program design and administration. Many companies, at critical junctures in their life cycles, must transform their cultures to regain or sustain success. A number of factors combine to define a company’s culture (see table), but across all factors, pay can be a key lever for sending signals about changes in priorities, influencing behavior, and driving transformation. Read more

Optimizing Pay Prominence

Pay prominence – the degree to which compensation is used as a front end driver of behavior – is a more pivotal dimension of compensation strategy than most companies realize. Semler Brossy's Barry Sullivan and Greg Arnold highlight the topic in advance of their upcoming session at the California HR Conference, being held August 26-28, 2013 at the Anaheim Convention Center. Read more