With the continuing economic rebound, top-line growth—especially organic growth—once again appears as an imperative at the top of company agendas. A well-designed executive compensation program can be used to spur growth. To determine how your company might use compensation to drive its growth strategy, consider the following:

Your answers could reveal that a key strategic lever—namely pay—is being underutilized.

Incentive plan design can reinforce growth strategies through performance measures that drive corporate and/or business unit top-line growth. To achieve direct line of sight and create accountability for the top-line growth objective, allocate growth goals to the business units and product lines. Use a “value tree” to pinpoint critical financial or strategic/operational measures for each department or function.

An annual and/or LTI plan or some sort of special incentive are most appropriate for addressing growth initiatives. Many companies measure top-line growth in a long-term incentive plan, while focusing on key drivers in their annual incentive plan. Given the greater uncertainty associated with the payback period on growth initiatives, a “catch-up” feature which allows participants to re-earn incentive amounts if goals are achieved later than originally anticipated.

For more discussion on these topics:

“Mobilizing and Engaging an Organization to Build Enduring Value”

“Should Do, Can Do, Will Do: Setting Incentive Goals that Yield Results”