Key PlayersZoom inDownload Infographic
The reach of executive compensation extends far beyond the executives themselves. Many players attempt to influence compensation decisions and direction. The long-term success of an executive compensation program requires an understanding of key priorities.
provide highly demanded analyses and voting recommendations for institutional investors, and as such, have a significant voice on pay and governance policy.
seek to ensure that executive compensation policies and practices do not come at the expense of the broader employee population.
is responsible for the design and administration of executive compensation programs. Each organization has a unique profile and philosophy on executive talent. The Human Resources function typically acts as the liaison between management and the Board of Directors on issues of executive compensation.
Boards of Directors / Compensation Committees
as representatives elected by shareholders, seek to ensure that executive compensation programs that support the creation and sustainability of shareholder value, from the attraction and retention of executive talent to performance-based compensation.
seek reasonable alignment of executive compensation with shareholder returns and sustainable company performance. A challenge in executive compensation design is the breadth of agendas and profiles among investors.
Federal & Regulatory Agencies
establish guidelines in the interest of public policy (e.g., tax, accounting standards, public information disclosure, good business practices).
seek to be compensated for their individual performance and contribution to the success of an organization. Similarly, each executive has a unique profile of ideal rewards — executive compensation is one component (also includes organizational affiliation, nature of the role, developmental and growth opportunities).
Board Advisory & Trade Groups
seek to provide information on trends and practices that help organizers improve performance and shape corporate governance (including executive compensation).