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Dear Reader,

Proxy season is upon us once again and expectations run high that pay and performance will show better alignment in company proxy statements. It seems companies have been searching for solutions to the executive compensation puzzle ever since the first disgruntled shareholder voiced a complaint.

We’re the first to concede that there are no easy answers. Yet, perhaps, finally we can offer a logical and comprehensive method for assuring executive pay is unassailable. Our study of the S&P 500 has found a correlation between pay and performance well in excess of 0.9 can be achieved by well-designed executive pay programs. What does it take? Sound pay/performance relationships, company-centric incentive design, and solid program governance. “Unassailable Executive Pay Demands a Whole New Set of Rules,” explains three tests companies can apply to measure the “unassailability” of their executive program design. Our research finds that companies with the best marks on these tests also realize better financial results.

Of course executive pay is just one challenge companies face. Equally daunting is the task of reining in employee health and benefit costs. Again, while no easy answers exist, “Winning the Employee-related Cost Challenge” presents inspiring tales of success from companies that applied a rigorous and disciplined framework focused on costs, causes and cures. Also in the arena of employee benefits, we take a look at “What Employers Need to Know About Providing Health Benefits to Same-Gender Spouses and Domestic Partners.”

Integrating sales forces can cause some major headaches. We believe that “Best Practices for Integrating Sales Compensation in Acquisitions” can ease some of the pain through its advice for integrating sales roles and compensation plans. And for further problem solving in the area of sales management, “Enter the Matrix GM: The General Manager for Today’s Market” explains how boundary-spanning roles are the key to making today’s matrix organizations work.

No easy solutions—seems to be a recurring theme in this issue. While our problem-solving approaches aren’t effortless, they are thoughtful, robust and effective. Maybe that’s the next best thing.

We appreciate your readership. Let us know what issues you are facing and whether this issue provided insights for you.

David C. Kuhlman
Chief Operating Officer
Sibson Consulting