When is the last time you looked really hard at every single employment agreement and plan document that touches your executives’ (and future potential executives’) compensation? As executive compensation retains its top spot on the list of most controversial issues for compensation professionals, it may be time for a thorough review and audit. These agreements...
On January 16, 2014 it was announced that Yahoo ended the employment of their COO and second in command, Henrique De Castro. Mr. De Castro was hired away from Google only 14 months earlier. His expertise in advertising was intended to be a major component in getting Yahoo back into a leadership position in this...
Once again proxy season is just about upon us. Over a few of my next posts, I am going to discuss different components of what ISS refers to as the “cost of equity plans.” Today it’s all about burn rate. The ISS burn rate limit is generally based on the mean burn rate plus the...
There are a wide array of methods that may link compensation to company performance. Some of these define “performance” broadly others define performance via more granular metrics. Broad linkages include Employee Stock Ownership Plans (check out http://www.nceo.org, standard time or service vested stock options, restricted stock and similar forms of equity compensation and Short and...
This is a very difficult question to answer with any accuracy. There are more variables than most people consider when granting equity compensation. 1. Is the individual a founder? If so, are they and “equal contributor” or is there an accepted imbalance in the founder contributions? 2. What is the “corporate event goal” for the...
On the WorldatWork Discussion Board, someone asked the following question: Are there any recommendations on sources to use for compensation data of privately-held companies (including executive compensation), besides using published surveys or conducting a private survey? Thank you. Dan Walter responds to this question that has a complex answer:
Twenty years ago, 162(m) was enacted by Congress. The purpose of this rule was to slow executive pay growth by capping the tax deductions on executive compensation at $1,000,000. There was an exemption for performance-based pay. The rule made it clear that typical stock options were among the compensation tools considered to be exempt from...
Many times, people who find out that part of my business is focused on executive compensation consulting ask how I can support “CEOs who are already making so much money.” I usually answer with a variation of “but, hardly anyone makes as much as you think.” When I inform people that most (>75%) CEOs make...
The NFL pre-season is once again upon us. New rules, players, coaches and referees, means new mistakes and new opportunities for improvement. Perhaps it’s no coincidence that the NFL season occurring the same period as the busiest time of the year for compensation professionals, makes me think about last minute improvements to performance and governance....
Retailers once again are promoting layaway. Budgets have tightened and credit cards have become increasingly used for subsistence. Layaway offers companies a way to get a committed customer before an item is delivered. It allows them to collect a bit of revenue stream with every payment adding to the stickiness of the relationship. How does...
