When it comes to compensation, it’s easy to get caught up in strategy and communication. We know that missing a chance at impacting the big picture is missing a chance at being successful. But, pay is also about the smallest of details. These include the language in plan documents, the timing of processing or reporting...
Question: What are the arguments for establishing long term incentive plan metrics that are different than those tied to the annual incentive plan? Answer (by Dan Walter) Great question! There are several arguments for clear differentiation between the metrics used for annual incentive plans and LTI plans. 1) The first concern is that overlapping metrics...
The 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...
David 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...
Pay for performance continues to rise. However, the failure of pay for performance is rising almost as fast. As the discussion about best practices continues, I thought I would provide a few thoughts about an approach that may work for your employees. Usually the drive for pay for performance comes from the top of the...
I generally write about incentive compensation, executive compensation and performance issues, but today’s post is written from a very different perspective. I hope you will bear with me on this. “Living Wage” is a term thrown about casually in the media and among politicians. It is not minimum wage. In fact, it has a very...
Sleep well sweet Prince, or perhaps Emperor. We now send executive compensation to its inevitable peaceful and infinite slumber. Shown brightly for a few decades, your glory days are over. April 29, 2015 was officially the beginning of the end of soaring executive pay. The SEC proposed a new rule on executive pay for performance,...
Jon Stewart, the host of the long-running Daily Show on Comedy Central, will be leaving the show later this year. When I heard this and the resulting response, three things came to mind: Executive Pay, Equity Compensation and Succession Planning. I figure I have about 600 words (about 2 minutes for you), so I should...
The holiday season is now in the rear-view mirror and everyone reading this post has recently had to answer some version the question, “what exactly do you do?” Maybe you had to explain it for the umpteenth time to a family member who spent the past year sending you articles about payroll. Maybe you had...
Question: Dan you say that only a portion of the shares are sold at IPO. Does this portion include all the shares that have been awarded to all the employees? Or just the top management group? Dan Walter’s answer Great question. The shares sold at the time of the IPO are usually reserved to those...
