We simplify the complexities of the executive pay process. Our consultants are skilled at helping clients design and administer programs that appeal to reason, hold up under scrutiny, and successfully link executive pay to shareholder value.
We work with the committee and management team to develop an appropriate compensation framework including peer group development and identification of other relevant market data sets, desired positioning relative to market, performance metrics, pay-for-performance alignment, role of salary, bonus and long-term incentive vehicles and perquisites, practices and policies regarding severance, deferred compensation, and stock ownership guidelines/retention requirements.
We evaluate total compensation levels and program designs relative to competitive market practices to 1) ensure that plans support the philosophy, corporate strategy, and organization, 2) review performance measures to ensure alignment with the client's value creation objectives, 3) improve "line of sight" and focus participants on the right priorities, 4) align executive interests with those of shareholders, 5) optimize tax, accounting, and dilution implications, and 6) align pay with performance.
We help our clients select performance metrics that are strongly aligned to the company’s business strategy and value creation. We evaluate annual and long-term incentive plan performance targets and ranges to ensure fairness and rigor through performance metric correlation studies, performance target and range-setting analyses, and performance goal difficulty assessments. Our work is based upon industry-leading research and best-in-class analytical tools.
We gather decision-quality data from appropriate sources to review award opportunities and mix. A critical aspect of our work is to supplement the data with our experience and expertise to shape appropriate recommendations specific to our clients and their unique situations.
We help evaluate client costs, equity plan share usage, and dilution to ensure that aggregate equity compensation plan expenditures align with the stated philosophy and market practices. Additionally, we provide equity plan review and development as well as assistance in securing shareholder approval of new equity plans or amendments.
We are originators of one of the most sophisticated realizable pay models in the industry and have conducted the most in-depth research on the effectiveness of realizable pay. In order to mitigate potential surprises, we are experts in understanding proxy advisor pay-for-performance methods, including developing prospective estimates (sensitivity modeling). We combine our original analyses with best-in-class proxy disclosure perspectives to articulate a compelling pay-for-performance story in the proxy Compensation Discussion & Analysis (CD&A).
We work with compensation committees to ensure compliance with legislative and SEC regulations (eg, CEO Pay Ratio); other regulations and best practices related to roles, responsibilities, and charters; client processes, schedules, and agendas; CD&A disclosures; and committee and executive assessment processes.
We work with compensation committees to address institutional investor and activist investor concerns with executive compensation programs and to help develop thoughtful strategies for engaging with shareholders. While it is important to consider external views, we are experienced with designing unique/creative pay programs that strongly align to the company’s business and talent needs, but may not be viewed as “typical” by some external parties.
We keep the compensation committee and management informed on emerging trends and key developments in executive compensation and benefits through periodic and ad hoc updates, as appropriate. More than just a briefing, we always take the next step to discuss the implications of each issue for our clients.
We are experts in conducting compensation program risk assessments that identify if components of incentive programs pose a material risk to the Company and associated disclosure in the CD&A.
We review executive arrangements, benefits, and perquisites from both a "how" and "how much" perspective. These reviews commonly include supplemental executive retirement plans, change-in-control arrangements, executive severance provisions, employment contracts, and perquisites.
We support compensation committees in developing hiring packages/executive contracts, termination packages/retirement of individual executives, and individual/team retention plans. Further, we have significant experience in supporting all forms of business transactions (i.e., mergers, acquisitions, divestitures, initial public offerings, spin-offs, up-lifts, etc.) and change-in-control related issues.
We evaluate non-employee director compensation levels relative to competitive practices by role and in aggregate, including cash and equity retainers, chairperson fees, special committee fees, ownership/retention guidelines, etc. We also provide assistance in the area of program design to ensure non-employee director compensation programs satisfy intended objectives while representing strong governance principles.