How Will The New Overtime Rules Affect You?

34899216_l (2)Is your mind already racing about how the new overtime regulations will affect your company? The media is buzzing about today’s release of the U.S. Department of Labor’s new rules regarding overtime pay.  The recent DOL publication highlights the following changes: Continue reading

Sam Reeve to Cover 4 topics at BLR Thrive 2016!

Performensation is pleased to announce that Sam Reeve, Performensation’s Executive Vice President of Consulting Services, will be presenting on four topics at the BLR Thrive 2016 annual conference, May 12-13, 2016 in Las Vegas!

Sam is a well-regarded compensation leader with broad and deep experience across many industries and virtually every size of company. Come to Las Vegas and spend a little one on one time learning more from Sam.

Sam’s presentations will cover:

The Cutting Edge of Compensation: Critical Trends of 2016 and Beyond

Selling the C-Suite on Your Compensation Plan: Secrets to Securing Executive Buy-In

Total Rewards Tactics for Motivating the Multigenerational Workforce

Sales Compensation Strategies for Retaining Selling Stars

 

Speed, Velocity and Acceleration in Pay

untitledI was reading a Facebook message a parent posted about their kid’s physics homework and it resonated as a reminder for the compensation world. The question was how do you explain the differences between speed, velocity and acceleration. A few years ago, I wrote an article about Newton’s Three Laws of Compensation Motion and I guess it’s time for another physics lesson.

Speed is a point on a graph. It tells you a whole bunch about an instant. Much of the data we use in compensation is like this.  We know exactly the amount or percentage, but we have little information regarding the path to that point. We feel like we somehow already have this information, but in most cases it’s a deception. Most pay data provides as little Continue reading

CEO Pay is a Problem, but not THE Problem

untitledFirst, I want to make it clear that plenty of CEOs are paid way too much money, but most are probably paid in accordance with the value they deliver. But, that is a topic for another post.

Let’s talk about how much CEOs get paid. I took a quick look at the CEO pay for the 2013 Fortune 100. In 2013, these 100 individuals were paid cumulative compensation of $918M! That is a lot of money; in fact, it’s a smack in the face. They are paid so much obviously they must be the most heavy-hitting movers and shakers among the wealthiest people in our country. So, I checked the 2015 list of Fortune’s 400 wealthiest Americans*.

It turns out the Continue reading

Paying Everyone Equally is a Terrible Idea

untitledMany of you may have read about Gravity Payments, the company in Seattle, Washington with the magnanimous CEO who decided to do the right thing. In April the CEO, Dan Price (great name for a comp article), decided to cut his own pay from $1Miliion to $70,000 annually and use the difference to provide raises in base pay to nearly the entire company. His goal was a minimum base pay of $70,000 for everyone. How could this possible go wrong? And, the media asked, “Why can’t everyone see how wonderful this is and do the same thing.”

Compensation professionals may immediately see some holes in this logic, but let’s list some of big items so we are Continue reading

5 Predictions about CEO Pay Ratio

Its All About the Golden Ratio (2)On August 5, 2015 the SEC voted to approve a new rule on the disclosure of the ratio of CEO pay to that of the median employee. This rule was a requirement of the Dodd-Frank Law passed in 2010. The details of the rule and what companies must do to prepare for it are all over the internet. This article covers what we can expect as a result over the next several years. Continue reading

5 Lessons for a Compensation Department of None

untitledOver the last few years, we have seen a rise in attention to the all too common, “HR Department of One”. These jacks-and-jills-of-all-trades, (and master of many), must be the policy maker, recruiter, trainer, confidant and much more for many companies. Often, on this very site, we talk about “compensation departments and compensation professionals” as if every company has one or both. But, what if, as is often the case, a company has NO compensation professional on staff? Or, what if the company has a great compensation analyst with little or no training in executive compensation, sales compensation or some other important specialty?

Many successful companies operate with Continue reading

For $0 CEOs, how is their initial equity-compensation determined?

Orig. Question on Quora.

Answer by Dan Walter:

Very few $0 CEOs start at $0 Salary.  Most start with a reasonable salary-bonus-equity combination.  As the company grows to be more successful and the equity they own (or have future rights to via vesting) becomes more valuable they reach a point where more salary basically pointless (since salary above $1,000,000 is not tax deductible to a profitable company it ios also pointless to the company).  In many cases any amount of salary at all is pointless due to the wealth of the individual.

Some of these CEOs at $0 salary have stock worth more than a Billion dollars.  $1M in salary equals one-thousandth of their company provide wealth.  Moving their salary to $0 is just a way to make that corporate thorn go away. Equity compensation keeps them aligned with shareholders and allows them to continue being rewarded for grwoth and success.

I should point out that some of the CEOs who do this make the effort for far more altruistic reasons, but most of the CEOs at a $0 salary have already crossed the salary-requirement threshold.

So, equity compensation for these CEOs is based on a combination of market data, internal worth and shareholder acceptability.