January - June 2011 MUSINGS ON PERFORMANCE AND COMPENSATIONLOCATION: COMPENSATION CAFE DATE: JUNE 22, 2011 The P90X Workout and Eﬀec)ve Performance Compensa)on I like ﬁnding unique training tools for compensaBon professionals. My newest addiBon is the P90X training system. For those of you who have not tried it, or seen the infomercials, I should describe the program. An individual works out at home using a series of DVDs that guide them through varying daily exercise programs. The sessions are lead by a dynamic leader named Tony Horton. Tony is in great shape and has very high energy. The program is very intense and requires a level of personal commitment MORE...LOCATION: COMPENSATION CAFE DATE: JUNE 14, 2011 A Founda)on Like a Ship, Not a Building This concept came to me at a recent compensaBon philosophy engagement. During an employee interview session I explained that the compensaBon philosophy would become the foundaBon for new compensaBon programs, pay levels and strategy. The very astute employee chimed in and asked: “We have a new CEO and were expanding into new business lines and markets. Won’t a strong foundaBon anchor us to where we are right now?” MORE...LOCATION: COMPENSATION CAFE DATE: JUNE 1, 2011 They S)ll Create New Music with the Old 12 Notes, You Can Do the Same with Compensa)on The basic scale used in western music incorporates 12 notes. The scale has only ﬁve lives (staves). This combinaBon of a simple structure and limited elements has been essenBally unchanged for hundreds of years. Somehow new music is created every second of every day. These limited components have given us Beethoven’s “9th Symphony”, Gershwin’s “Rhapsody in Blue”, John Lennon’s “Let it Be” and literally MORE...LOCATION: COMPENSATION CAFE DATE: MAY 19, 2011: Total Rewards and a Farmers Market Strategy It is fact that poor food choices lead to poor health. Of course, there are many other contributors, but when food is bad, health almost always follows. In the United States, bad food is oen cheap food. We have found ways to feed our country more while providing less of what is truly needed. People don’t starve, but neither the body nor the brain can operate at peak performance. We ﬁnd ways to keep people alive, but is it really helping them thrive? In the end, this short-‐term soluBon creates too
MUSINGS ON PERFORMANCE AND COMPENSATIONLOCATION: COMPENSATION CAFE DATE: MAY 10, 2011 Are Your Compensa)on Goals GeVng You to the Top of the Wrong Mountain? So oen we see companies whose execuBves are paid handsomely only to falter shortly aer. How does this happen? Goals were apparently met. Success seemed to have been achieved. But the ﬁnal result of the goals and success is a large payout followed by a sharp corporate collapse. Are we doing something wrong when we incenBvize our execuBves? As the evoluBon of Dodd-‐Frank and mandatory Say-‐On-‐Pay quickly impacts execuBve MORE...LOCATION: FORBES EXECUTIVE PAY WATCH DATE: MAY 3, 2011 Companies Deserve Pay Transparency, Too ExecuBve compensaBon is jusBﬁably complex. In fact, the total compensaBon for nearly everyone in this country is diﬃcult to communicate. Those at the highest corporate levels generally have pay structures that reﬂect the complexity of their company. Regardless of the intricacy of execuBve pay programs, it is sBll a very reasonable request to ask for pay transparency from these publicly traded ﬁrms. New disclosure rules have taken another step or two up the ladder towards percent to MORE...LOCATION: COMPENSATION CAFE DATE: APRIL 25, 2011 Icing is Nice, but Fros)ng is Essen)al (Compensa)on is like Cupcakes) How is compensaBon like a cupcake? Is it just that people crave it, or is it something far more fundamental? I’d like to suggest that it is in understanding the important diﬀerence between frosBng and icing. Think about generic plans created from stale boilerplate documents. Or, communicaBon programs which teach lihle and inspire nothing beyond high-‐level overviews or lengthy legal documents. Or, even sales compensaBon plans promising MORE...LOCATION: COMPENSATION CAFE DATE: APRIL 19, 2011 Are You Pushing the Wrong Rock up the Hill? We all know the story about Sisyphus, the man who was sentenced for eternity to roll a stone up a hill only to have the stone roll back down and begin again. I have been speaking to compensaBon professionals recently who seem to have assigned themselves this same punishment. In one case, I recently spoke to a company who has placed communicaBons at the top of their “needs” list each of the last few years. They are fully aware that their MORE...
MUSINGS ON PERFORMANCE AND COMPENSATIONLOCATION: COMPENSATION CAFE DATE: APRIL 8, 2011 Curiosity May Kill Cats, but It Saves Compensa)on Professionals Do you ever wonder why you are reading this arBcle? No one is paying you to read this. Your boss will probably never even know that you read it. Why take a few more minutes out of your busy day for something that only you truly value? The answer is simple. You are a curious person. (Fair warning this is a “so” arBcle with no staBsBcs or compensaBon rules) We are always told that curiosity kills cats. The theory is that it gets cats into trouble MORE...LOCATION: COMPENSATION CAFE DATE: MARCH 28, 2011 Compensa)on is a Balancing Ac)on (Not an Act) Have you ever used one of those workout things called a “Bosu Ball”? A Bosu Ball is half a workout ball ahached to a round plasBc plalorm. Many people workout standing on the so, round ball side. My trainer turns it upside down and makes me stand on the ﬂat plasBc side. Balancing with the round side on the ﬂoor requires concentraBon and constant adjustments. Add some basic weights or movements and the process makes you stronger, while exhausBng you. The trick is making frequent MORE...LOCATION: COMPENSATION CAFE DATE: MARCH 16, 2011 Compensa)on and Loyalty: The Head and the Heart Recently, I was working onsite at a client’s oﬃce doing a series of employee engagement interviews. The company is looking for ways to move to the next level and I suggested that we ﬁnd out what their employees were thinking before we guessed at any type of new compensaBon program. These types of interviews are almost always eye-‐opening and this case was no diﬀerent. On the bright side, a steady stream of employees came through the interview room MORE...LOCATION: COMPENSATION CAFE DATE: MARCH 8, 2011 What Do You Do if You Don’t Like Your (Stock) Op)ons In my Febraury 25, 2011 posBng “Stock OpBon Moving Sale”, I suggested that rather than end up with the compensaBon equivalent of acid washed jeans or a teal mock-‐ turtle neck, perhaps a beher shopper could ﬁnd deals that were a bit less trendy or even tenuous. Equity compensaBon may be beher uBlized like a list of 401K investments. Imagine diﬀerent tools balancing at the same Bme to create a more eﬀecBve compensaBon package. People using a single instrument, like stock opBons, MORE...
MUSINGS ON PERFORMANCE AND COMPENSATIONLOCATION: DATE: Stock Op)on Moving Sale! Everyone loves when a business or a family down the street has a moving sale. You have opBons to buy stuﬀ at a discount even if you might not need it. Heck, someBmes you purchase something even if it might be out of fashion by the Bme you ﬁnally get around to using it. You convince yourself that the discount jusBﬁes buying things that you might even have owned and found not to work in the past. Maybe this Bme that type of skirt will look good on you. Maybe this Bme you will lose the weight and be MORE...LOCATION: COMPENSATION CAFE DATE: FEBRUARY 14, 2011 Enough is Enough. Knowing When to Say When on Compensa)on SomeBmes enough is enough. I had a client go through a surprisingly good experience last week that made me realize the posiBve context of this cliche. Aer several years of being beaten up by insBtuBonal shareholders about equity compensaBon burn rates and usage, they are now in a posiBon to ask for, and get approved, more shares than they have used in the past 3 years. Here’s the interesBng thing, they won’t be asking for it all... Yes, Virginia, there is a company who shows restraint. MORE...LOCATION: COMPENSATION CAFE DATE: FEBRUARY 4, 2011 In a Vacuum of Informa)on People Will Use Imagina)on I love talking to employees about their compensaBon plans. It is always easy to see the people who work at companies with eﬀecBve communicaBon programs. Whether the staﬀ likes or dislikes the plans they tend to provide similar details. They generally understand the components of the programs. And they have an idea of what it takes to progress within them, earn something from them or otherwise take advantage of them. If I have to be honest, my favorite employees are at the companies that have a MORE...LOCATION: COMPENSATION CAFE DATE: JANUARY 25, 2011 What Do Your Employees Really Think About Pay? Last Friday I was in the ﬁnal stages of ediBng when I came across the exchange of messages below posted on a social networking site. All messages were posted within about an hour of each other. Employee 1: Morgan Stanley, which is the owner of the worlds largest brokerage, cut the investment banks compensaBon pool 2% last year to $7 billion. Morgan Stanleys MORE...