Sales Compensation in a World of Solutions

Sales Comp in a World of SolutionsMany companies today know that customers are looking for more value. Haven’t you found that selling a simple product or service just doesn’t feel like “enough” anymore? Are you wondering how to adjust your strategy to increase your future success? With technology becoming increasingly complex, your customers need additional help understanding how things fit together.

As a case in point, Continue reading

What’s the Right Size for Private Company Equity Compensation?

T shirtThe most common question asked about equity compensation is only two words: “How much?” For private companies, it is frustratingly hard to answer. The crux of every equity compensation conversation is how much to give. The answer leads to the best equity instrument to use, features of the plan, expected exit strategy, or time to liquidity. Determining levels for private companies is never as simple as Continue reading

Executive Pay Claw backs – Things Just (Almost) Got Real!

Clawbacks - the SEC is serious - image (2)The date: July 1, 2015.

The place: Washington D.C.

The situation: The SEC proposes rules for executive compensation claw back provisions required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The SEC has finally proposed the long-awaited rules for executive pay claw back. Rule 10D-1 describes who, what, when and how “erroneously awarded executive compensation” must be returned to the company.

Who: The net is fairly deep and broad.

Recovery would be required from Continue reading

Is Your Company Lying About Pay?

untitled3David Larcker and Anastasia Zakolyukina did some research in 2012 for the Rock Center for Corporate Governance at Stanford University. Luckily, it recently made its way back into circulation. The paper, “Detecting Deceptive Discussions in Conference Calls”, attempts to predict the level of deception or truthfulness of CEO communications to shareholders. They found “that the answers of deceptive executives have more references to general knowledge, fewer non-extreme positive emotions, and fewer references to shareholder value. In addition, deceptive CEOs use significantly more extreme positive emotion and fewer anxiety words.”

1)     Less truthful CEOs tend to Continue reading

1.8 Million Reasons NOT to Become CEO

1point8 million reasons not to work-f2 (2)Being the CEO of a company is a great job, if you can get it. It’s an even better job if you can be paid NOT to get it!

Coty is the multinational beauty manufacturer of brands such as: Calvin Klein fragrances, Davidoff perfumes, Adidas Bodycare, and Sally Hansen nail care products. The company has just announced that it must pay someone $1.8 million even though they didn’t actually work as the company’s CEO. How in the world can this happen? Let me explain. Continue reading

HR Can’t Afford to Ignore Compensation

whiteboard lightbulb dollarsign (2)A generous person gave three business partners $1 million and said they could use it however they wanted. The only caveat was that the business plan allocated 70% of the money to predetermined overhead. This could be reduced to as little as 55% if the partners planned and executed carefully. While all three individuals agreed to accept the money, they had very different ideas on what to do with it. Continue reading

Silence Isn’t Golden

untitled1I hope your employees aren’t complaining about your compensation programs. If they are complaining out loud, then the problem has likely been there for a while and you need to address it post haste. But, that’s not what this article is about. We all can, and do, identify problems as they become vocal. I want to talk about compensation programs that people aren’t complaining about.

Most of us have been taught that silence is golden. That simply isn’t true in our line of business. When it comes to pay, if people aren’t talking about it then Continue reading

8 Ways the Minneapolis Skyway is Like Incentive Compensation

untitledThose of you who regularly read my articles know I often view the world from a different perspective. This is one of those posts. WorldatWork is the main professional association for total reward professionals. Each year they put on an excellent conference and this year was no exception. The theme for the event was “Grow.” The setting was Minneapolis, MN. The weather, as one might expect, was capricious. The conference had tons of great sessions and speakers, but the most important lesson I learned was from Minneapolis’ famous Skyway.

If you have ever been to Minneapolis, the Skyway is sort of a hamster “Habitrail” for humans. It is a system of above ground tunnels that provide shelter from the extreme weather conditions that residents call “seasons.”

After using the Skyway to get from my hotel to the conference site, I realized that the system was exactly like incentive compensation. Continue reading

The Best Performance Goals Are D.U.M.B.

untitledAnyone who has taken a class or performed a Google-search on performance goals has learned about the concept of “SMART” goals. The most common breakdown seems to be: S – Specific, M – Measureable, A – Attainable, R – Relevant, and T – Time-bound. We all seem to know this and yet many still seem to have problems creating successful pay for performance programs. I would like to propose a new D.U.M.B. approach that celebrates the spirit of insanity.  Insanity is being defined as the repetition of doing the same thing, again and again, with the expectation of different results. If SMART goals aren’t working for you, why not try DUMB goals?

D.U.M.B Goals are: Continue reading

8 Things You’ve Gotta Know about Equity Compensation

untitledpEquity compensation continues to be a confusing topic for compensation professionals and with good reason. Equity compensation is not just variable compensation. It’s variable, variable, variable, variable compensation. There’s the variable of stock price. There are variable numbers of shares, units, options or rights. There are variable types of awards, variable vesting timing, variable (for international participants) currency rates and for many recent awards, there are variable performance conditions. So, it’s not just four variables I mentioned earlier, but six or more variables that come into play. This can be tough to grasp in the compensation world where everyone would really like some level of expected consistency.

In addition to all of the variables, there are Continue reading