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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.

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

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

You’ve Failed Say on Pay—Now What?

Year-over-year changes in CEO pay have a greater effect on the likelihood of passing a future say on pay vote after a failure than shareholder engagement and program changes. Read more

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