CD&A or exposé? By bringing together all components of executive compensation, the CD&A may give the compensation committee its first look at the scope of the program. A sound program presents a compelling case to investors; a problematic program will raise red flags. Lessons from the first year of CD&A development can be the springboard to diagnose issues, foster dialogue and improve executive compensation design. To support the interests of all stakeholders, executive pay must be grounded in a solid compensation strategy, balance cost with value, truly drive and reward business results, and compel good governance. Read the entire article written by Seymour Burchman, Blair Jones and Doug Tormey as it appeared in Workspan. Read more
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.
The media and activist groups often point to company peer groups as a contributor to excessive executive pay. Shareholders deserve a compelling rationale as to why specific companies are considered peers and for what purpose, e.g., pay comparison, performance comparator, or models for program design? Compensation committees can follow four guidelines to help ensure their peer group represents a reasonable gauge for assessing the competitiveness of company performance and executive rewards. Read the entire article written by Blair Jones, Roger Brossy and Chip Thomas, as it appeared in Workspan. Read more
The use of a performance-based alternative using RSUs has (i) greater alignment with stock performance/shareholder return, (ii) considerably lower accounting cost, and (iii) the potential for upside. In many cases, this alternative will provide a more shareholder friendly way to offer supplemental retirement benefits to executives. Read the entire article (PDF) written by Seymour Burchman and Blair Jones. Read more
Compensation committees are bombarded with so much information these days, they need some analytics to make sense of it all. Here we explore four tests that will help them understand the elements of their executive compensation program and how they work together. Read more
When it comes to executive compensation plans, so many companies these days have taken the approach of “following the leader,” thinking it will keep them safely under the radar. Unfortunately, such thinking can lead to a lost opportunity. We have developed three tactics to make programs as unassailable as possible. Read the entire article (PDF) written by Blair Jones. Read more
Something in the way Boards review and approve executive pay frequently goes awry. To avert these common breakdowns, here are six suggestions for sharpening compensation committee foresight. Read the entire article (PDF) written by Roger Brossy. Read more