We help our clients align total rewards with business strategies to deliver maximum return on their compensation investments. We are pioneers in transforming executive compensation into a performance-driven tool for increasing economic and shareholder value.
A company's peer group includes its key talent and business competitors, making it a critical barometer for assessing pay competitiveness. We help companies develop, or validate, customized peer groups and determine how their pay compares. We ensure that the most appropriate companies are included as peers so pay comparison reflects the best possible match.
In assessing pay competitiveness, we examine all components of total compensation, including base salary, annual incentives, long-term incentives, benefits and the value of perquisites and retirement packages. We take into account important filters, such as company size, industry and business model. Sources include proxy data for peer group companies, supplemented, as appropriate, by published survey data for broader markets.
We seek answers to questions such as:
We analyze your current compensation program and recommend new approaches to strengthen the pay/performance link. Our work is guided by one goal: to ensure a strong pay-for-performance relationship that creates value for shareholders and delivers a portion of that value to the executive team.
We test the compensation system by assessing the competitive market and considering the aggregate economics of the company. We evaluate long-term incentive plans to ensure a balance of vehicles and designs that moderate dilution and market risk. We help create a balanced portfolio that is viable and sustainable in both times of economic prosperity and poor market conditions.
We examine eight incentive plan design elements (purpose, participation, measures, performance targets, award structure, funding, communications and improvement, governance and administration) to develop business-based solutions to fundamental questions, including:
Performance measurement and goal setting are the crux of incentive plan design. We work with companies to identify the measures of company performance that align with their strategies and serve as the best drivers of desired results. We may blend financial measures, such as stock price/total shareholder return, return on invested capital and EPS growth, with "softer" metrics, (e.g., succession planning, global expansion and customer service) that lead to business success.
When establishing goals, we want to ensure that executives have clear line of sight and that goals are clearly linked to desired outcomes. We test potential payouts under a range of scenarios to ensure performance targets serve shareholder interests while delivering appropriate value to executives.
We ask — and help to answer — the challenging questions that consider the interests of all stakeholders, such as:
We work with boards of directors, compensation committees and their external advisors on performance contracts and compensation arrangements for members of the executive team. We evaluate both current arrangements and advise on new or prospective provisions. We carefully analyze all provisions to demonstrate potential outcomes under various employment scenarios. Our analysis considers issues including:
We work with companies to assess current offerings and design new programs that fit the company's business circumstances and culture. We review supplemental benefits, SERPS, non-qualified plans and deferred compensation, including "top hat" plans. We advise companies on the following:
We work with companies in transition, stemming from an IPO, sale or acquisition. Taking into account competitive practice, share utilization, talent requirements and business objectives, we build equity compensation plans to support the organization in its next phase of development. This ensures the company provides meaningful equity opportunities that continue to attract, retain and motivate executives. We address issues such as the following:
Extraordinary situations (such as a downturn or turnaround, a major strategic shift, global diversification or the launch of a new product line) may call for unique compensation opportunities. We advise companies on the use of special plans designed to provide significant rewards for taking the organization to a new level. Whether aspirational or a stopgap, we guide clients through decisions such as the following:
Companies entering and emerging from bankruptcy proceedings are concerned about the retention and attraction of the executive talent that will see the organization through its challenges. For those entering or emerging from Chapter 11, compensation becomes an essential tool for retaining and attracting executives skilled at affecting a turnaround.
We design key executive incentive plans that meet the needs of the organization, shareholders and executives. We provide information about bankruptcy trends, precedents and rulings, enabling us to benchmark compensation practices and provide meaningful, constructive plan designs.
We help clients in all elements while navigating the transition: structures, plan designs, levels and mechanics-addressing. We develop stopgap plans to address immediate needs as well as integrated compensation offerings, addressing issues including: