This document summarizes a presentation on executive compensation. It discusses objectives of compensation programs such as attracting, retaining, and motivating talent. It also outlines major elements of compensation including salary, annual incentives, long-term incentives, benefits, and perquisites. Additionally, it addresses linking compensation to company performance, benchmarking against peer groups, and considering compensation in the context of business planning events like succession, strategic planning and crisis planning.
Executive Compensation Checklist for New and Experienced Board Members (Credi...NAFCU Services Corporation
Looking for an Executive Compensation Checklist for your Credit Union? This presentation serves as a valuable tool for new and experienced board members in pinning down the latest information on new regulations and compensation philosophies associated with creating a successful executive compensation plan. For more info, visit: www.nafcu.org/bfb
Take this opportunity to learn about identifying and comparing to your competitors, building commitment and employee engagement and developing a total strategy that supports your organization’s mission and strategic plan.
Our webinar is structured to provide not only education but also useful strategies for addressing the many pressures on executive compensation, wages and salaries. Nonprofits are being scrutinized by the IRS, and executive compensation is a staple of all audits. Nonprofit managers and trustees must prepare for public, media, Form 990, IRS and State scrutiny. Wage and salary programs face a difficult economy as they struggle to attract and retain the best talent with scarce dollars.
Executive Compensation Checklist for New and Experienced Board Members (Credi...NAFCU Services Corporation
Looking for an Executive Compensation Checklist for your Credit Union? This presentation serves as a valuable tool for new and experienced board members in pinning down the latest information on new regulations and compensation philosophies associated with creating a successful executive compensation plan. For more info, visit: www.nafcu.org/bfb
Take this opportunity to learn about identifying and comparing to your competitors, building commitment and employee engagement and developing a total strategy that supports your organization’s mission and strategic plan.
Our webinar is structured to provide not only education but also useful strategies for addressing the many pressures on executive compensation, wages and salaries. Nonprofits are being scrutinized by the IRS, and executive compensation is a staple of all audits. Nonprofit managers and trustees must prepare for public, media, Form 990, IRS and State scrutiny. Wage and salary programs face a difficult economy as they struggle to attract and retain the best talent with scarce dollars.
CEO Pay: A Middle Market Perspective, presented to the Minneapolis-St. Paul NASPP Chapter on March 27, 2014.
Executive compensation has continued to evolve in recent years. Companies are increasingly required to balance the need for competitive pay with the need to respond to increased scrutiny, particularly with regard to the relationship between pay and performance.
To provide some insight and perspective, Buck Consultants has recently completed a study of executive compensation practices and trends in the middle market. In this study, Buck analyzed total direct compensation for Chief Executive Officers in companies listed on the S&P 400 MidCap Index.
In this presentation, we will discuss our findings with regard to both current practices and trends for CEO pay in these Mid-Cap companies. Because long-term incentives typically comprised the largest portion of executive compensation, our study focused on prevalence, mix, usage and design of equity vehicles. Finally, we will look at governance issues, including corporate governance concerns and the degree of alignment between pay and performance.
5, 4, 3, 2, 1: The Code to Better Compensation PlanningPERFORMENSATION
This presentation provides an entirely new approach to planning everything from your year down to your day. Designed for HR and Compensation professionals, we unveil our 5D-4W-3M-2Q-1Y code and how to put in action to become more efficient and effective.
This presentation was originally given on February 6, 2013 to more than 600 compensation professionals webinar attendees. Don't be the only compensation professional to miss out on this excellent program.
Learn how to more effectively plan and manage: Executive compensation, Long term incentives, Short Term Incentives, Bonuses, Merit increases, Performance appraisals, Performance reviews, Survey analysis and much more.
Discusses Major Compensation Issues regarding Executive Compensation. Provides Justification for Unreasonable Executive Compensation and Outlines measures for Executive Accountability
Equity Compensation: End-to-End Strategies for Private CompaniesRoseRyan
How you design and execute your equity compensation plan has significant impacts on many areas of your business, including employee retention, market valuation and readiness for an exit event. These slides by legal, HR and accounting experts in Silicon Valley show you how to set yourself up for success, avoid common pitfalls and plan for an M&A deal or IPO and are drawn from a RoseRyan seminar.
The allocation of executive compensation resources is being scrutinized by internal and external forces. Regulations, board governance issues, and the lower margins require new thought processes on the various pieces of the compensation puzzle and how they fit together.
This presentation covers the realities of performance-0based equity in the Silicon Valley. Presenters includes professionals from Intel, eBay, Applied Materials and Performensation. Learn about the foundation and details of adding performance to equity compensation plans.
Everything about Performance Equity Compensation (or as much as fits into an ...PERFORMENSATION
The use of performance-based equity is on the rise. This presentation discusses how to select metrics, set goals,and design a plan. It also covers communication, accounting and administrative concerns.
Presented to BACA (Bay Area Compensation Association 10/21/2010)
Most business leaders believe that some portion of employee pay should be in the form of incentives, but are left struggling to find answers to key questions: How much of someone’s pay should be variable? And who should have incentive pay as part of their mix? How much of the incentive should be short-term and how much should be based on long-term performance? What type of incentive(s) should it be? What if I don’t pay incentives and just pay higher salaries than my competitors? Will that work just as well?
If these are questions you are facing, don’t miss this presentation!
This is a project for a High School AP Psychology course. This is a fictionalized account of having a psychological ailment. For questions about this blog project or its content please email the teacher Chris Jocham: jocham@fultonschools.org
CEO Pay: A Middle Market Perspective, presented to the Minneapolis-St. Paul NASPP Chapter on March 27, 2014.
Executive compensation has continued to evolve in recent years. Companies are increasingly required to balance the need for competitive pay with the need to respond to increased scrutiny, particularly with regard to the relationship between pay and performance.
To provide some insight and perspective, Buck Consultants has recently completed a study of executive compensation practices and trends in the middle market. In this study, Buck analyzed total direct compensation for Chief Executive Officers in companies listed on the S&P 400 MidCap Index.
In this presentation, we will discuss our findings with regard to both current practices and trends for CEO pay in these Mid-Cap companies. Because long-term incentives typically comprised the largest portion of executive compensation, our study focused on prevalence, mix, usage and design of equity vehicles. Finally, we will look at governance issues, including corporate governance concerns and the degree of alignment between pay and performance.
5, 4, 3, 2, 1: The Code to Better Compensation PlanningPERFORMENSATION
This presentation provides an entirely new approach to planning everything from your year down to your day. Designed for HR and Compensation professionals, we unveil our 5D-4W-3M-2Q-1Y code and how to put in action to become more efficient and effective.
This presentation was originally given on February 6, 2013 to more than 600 compensation professionals webinar attendees. Don't be the only compensation professional to miss out on this excellent program.
Learn how to more effectively plan and manage: Executive compensation, Long term incentives, Short Term Incentives, Bonuses, Merit increases, Performance appraisals, Performance reviews, Survey analysis and much more.
Discusses Major Compensation Issues regarding Executive Compensation. Provides Justification for Unreasonable Executive Compensation and Outlines measures for Executive Accountability
Equity Compensation: End-to-End Strategies for Private CompaniesRoseRyan
How you design and execute your equity compensation plan has significant impacts on many areas of your business, including employee retention, market valuation and readiness for an exit event. These slides by legal, HR and accounting experts in Silicon Valley show you how to set yourself up for success, avoid common pitfalls and plan for an M&A deal or IPO and are drawn from a RoseRyan seminar.
The allocation of executive compensation resources is being scrutinized by internal and external forces. Regulations, board governance issues, and the lower margins require new thought processes on the various pieces of the compensation puzzle and how they fit together.
This presentation covers the realities of performance-0based equity in the Silicon Valley. Presenters includes professionals from Intel, eBay, Applied Materials and Performensation. Learn about the foundation and details of adding performance to equity compensation plans.
Everything about Performance Equity Compensation (or as much as fits into an ...PERFORMENSATION
The use of performance-based equity is on the rise. This presentation discusses how to select metrics, set goals,and design a plan. It also covers communication, accounting and administrative concerns.
Presented to BACA (Bay Area Compensation Association 10/21/2010)
Most business leaders believe that some portion of employee pay should be in the form of incentives, but are left struggling to find answers to key questions: How much of someone’s pay should be variable? And who should have incentive pay as part of their mix? How much of the incentive should be short-term and how much should be based on long-term performance? What type of incentive(s) should it be? What if I don’t pay incentives and just pay higher salaries than my competitors? Will that work just as well?
If these are questions you are facing, don’t miss this presentation!
This is a project for a High School AP Psychology course. This is a fictionalized account of having a psychological ailment. For questions about this blog project or its content please email the teacher Chris Jocham: jocham@fultonschools.org
During a Russian Summer network BBQ in 2015 in the Hague, WestHolland presented this Pubquiz with questions about typical Dutch culture and Dutch-Russian historical events, emphasing its long term relationship and friendship.
For general inquiries or answers to the pubquiz please contact WestHolland.
Apple Executive Compensation Policy WITH VIDEOExkalibur.com
Apple's Executive Compensation Policy incorporates 5 Cornerstones of Executive Compensation that represent a set of proven concepts that can be effectively applied to your business. I've also created a video describing Apple's plan (it appears on the first slide) which explains some of these concepts.
Check it out and let me know what we might be missing at http://www.Exkalibur.com.
Executive Compensation: Exploring Models and Considerations in Corporate Remu...assignmentcafe1
Welcome to our comprehensive SlideShare presentation on executive compensation, where we delve into the intricate world of corporate remuneration models and considerations. Join us as we explore the various approaches, challenges, and ethical considerations surrounding executive compensation in today's corporate landscape.
In this enlightening presentation, we aim to provide a nuanced understanding of the complexities involved in determining executive compensation packages. We examine different models and frameworks, including performance-based pay, equity-based incentives, and bonus structures, and assess their effectiveness in aligning executive incentives with organizational goals.
Through a careful analysis of industry practices, regulatory frameworks, and shareholder perspectives, we explore the considerations that shape executive compensation decisions. We delve into the challenges of balancing competitive market forces, ensuring fairness and transparency, and addressing concerns related to income inequality and excessive executive pay.
Furthermore, we examine the impact of executive compensation on corporate governance, organizational culture, and long-term value creation. We discuss the influence of compensation structures on risk-taking behavior, strategic decision-making, and the attraction and retention of top talent within the company.
Our presentation goes beyond theoretical discussions by incorporating real-world examples and case studies. By exploring notable instances of successful and controversial executive compensation practices, we aim to provide practical insights and lessons for organizations navigating this complex landscape.
Through this exploration, we encourage reflection and dialogue on the ethical dimensions of executive compensation. We consider the perspectives of various stakeholders, including shareholders, employees, and society at large, and discuss the importance of designing compensation packages that align with broader social and organizational values.
Join us as we delve into the multifaceted world of executive compensation, analyzing different models, considerations, and ethical implications. Together, let us gain a deeper understanding of the intricacies surrounding corporate remuneration and explore ways to promote fairness, accountability, and long-term sustainable growth.
Introduction1but the focus in this chapter is pay. they al.docxmariuse18nolet
Introduction
1
but the focus in this chapter is pay.
they all help maintain employee commitment
There are many work motivators, including
promotions
desirable work assignments
peer recognition
work freedom
Rewards Review
2
bonuses
piecework
commission
incentive
plans
merit pay
plans
cost of living
increase
labor market
adjustment
profit sharing
time-in-rank
increase
protection
Program
pay for time
not worked
services/
perks
assigned
parking space
preferred
assignments
business
cards
own
secretary
impressive
title
participation in
decision making
greater job
freedom
more
responsibility
opportunities
for growth
diversity
of activities
Financial
Non-financial
Extrinsic
Implied
membership-based
Performance
based
Explicit
membership-based
Intrinsic
Types of Reward Plans
3
intrinsic rewards (personal satisfactions) come from the job itself, such as:
pride in one’s work
feelings of accomplishment
being part of a work team
extrinsic rewards come from a source outside the job, mainly by management:
money
promotions
benefits
Intrinsic versus Extrinsic Rewards
Types of Reward Plans
4
financial rewards:
Financial versus Nonfinancial Rewards
nonfinancial rewards:
wages
bonuses
profit sharing
pension plans
paid leaves
purchase discounts
make life on the job more attractive; employees vary greatly on what types they like
Types of Reward Plans
5
performance-based rewards are tied to specific job performance criteria
commissions
piecework pay plans
incentive systems
group bonuses
merit pay
membership-based rewards such as cost-of-living increases, benefits, and salary increases are offered to all employees
Performance-based versus Membership-Based
Compensation Administration
6
An effective, fair compensation program:
Companies derive their compensation programs from job evaluation, which defines the appropriate worth of each job.
Both employees and employers
can research compensation
facts and issues at
www.salary.com
http://salary.nytimes.com/
http://www.salaryexpert.com/
attracts
motivates
Retains competent employees
Compensation Administration
7
The Fair Labor Standards Act requires:
minimum wage
overtime pay
record-keeping
child labor restrictions
exempt employees
include professional and
managerial employees
not covered under
FLSA overtime provisions
nonexempt employees
eligible for premium pay
(time and one-half)
when they work more than
40 hours in a week
Compensation Administration
8
Civil Rights Act:
broader than Equal Pay Act
prohibits discrimination on the basis of gender
used to support comparable worth concept
salaries established based on skill, responsibility, effort, and working conditions
Equal Pay Act of 1963 requires that men and women hired for the same job be paid the same.
Job Evaluation and the Pay Structure
9
Job analysis information determines the relative value, or rank, of each job in the organization.
Research wage information at
the Bureau of Labor Statistics
http://.
Total rewards is a concept that describes all the tools available to an employer that may be used to attract, motivate, retains and engages the employee.
Total rewards may also refer to the function or department within HR that handles compensation and benefits, or the combined intrinsic and extrinsic rewards (or value) that an employee perceives.
SEC Adopts Enhanced Compensation and Corporate Governance Proxy Disclosure Rules for 2010 Proxy Season
A Practical Approach to What Companies, Boards and Compensation Committees Need to Do Now
Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
Know more: https://www.synapseindia.com/technology/mean-stack-development-company.html
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
RMD24 | Retail media: hoe zet je dit in als je geen AH of Unilever bent? Heid...BBPMedia1
Grote partijen zijn al een tijdje onderweg met retail media. Ondertussen worden in dit domein ook de kansen zichtbaar voor andere spelers in de markt. Maar met die kansen ontstaan ook vragen: Zelf retail media worden of erop adverteren? In welke fase van de funnel past het en hoe integreer je het in een mediaplan? Wat is nu precies het verschil met marketplaces en Programmatic ads? In dit half uur beslechten we de dilemma's en krijg je antwoorden op wanneer het voor jou tijd is om de volgende stap te zetten.
Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
As a business owner in Delaware, staying on top of your tax obligations is paramount, especially with the annual deadline for Delaware Franchise Tax looming on March 1. One such obligation is the annual Delaware Franchise Tax, which serves as a crucial requirement for maintaining your company’s legal standing within the state. While the prospect of handling tax matters may seem daunting, rest assured that the process can be straightforward with the right guidance. In this comprehensive guide, we’ll walk you through the steps of filing your Delaware Franchise Tax and provide insights to help you navigate the process effectively.
Memorandum Of Association Constitution of Company.pptseri bangash
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
www.seribangash.com
Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
Taurus Zodiac Sign_ Personality Traits and Sign Dates.pptxmy Pandit
Explore the world of the Taurus zodiac sign. Learn about their stability, determination, and appreciation for beauty. Discover how Taureans' grounded nature and hardworking mindset define their unique personality.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
Search Disrupted Google’s Leaked Documents Rock the SEO World.pdf
Nacd directors college presentation spring- 04-16-11(final)
1. NACD Directors’ College Spring 2011 April 16, 2011 Co-Presented by: Henry OehmannGrant Thorntonhenry.oehmann@us.gt.com919.881.2773 Ron RaxterWilliams Mullenrraxter@williamsmullen.com919.981.4304
2. Agenda Overview of executive compensation Update-legal and regulatory environment Compensation and business event planning Top Ten Compensation Considerations Page 2
3. Overview of Compensation Objectives Three key objectives of your compensation program are the following: Attract and hire new executive skills Retain talent Motivate behavior and performance Page 3
4. The Compensation Consultant’s Perspective Start with the compensation philosophy Discuss and utilize each of the pay elements Link pay to company performance Use pay to support the major planning events: succession, strategic and crisis plans. Page 4
17. Calibrated to target market based on job content and scopeExecutive Perquisites Core Benefits Long-Term Incentive Total Rewards Annual Incentive Total Cash Base Salary Bothdecision processes and competitiveness of these elements must be consistent with applicable tax provisions Page 5
18. Start with the Compensation Philosophy Balance executive needs with shareholder expectations; Rewarding performance: What is a fair share of profits for executives? Equity pay for executives can be dilutive for shareholders: Where’s the balance? Set a comparable position within the market; Should the 75th percentile be a default? Who should be compared? Page 6
19. Start with the Compensation Philosophy (continued) Assess role of each pay element and trade-offs; Base salary anchors the program; How should cash incentives and stock add to the mix? Retirement packages? Termination and CIC benefits? Perquisites and the public. Address the link between pay and performance. Page 7
20. Discuss the Role and Mix for Each of the Pay Elements Salary - attract and retain Incentives - leverage performance Risk: How much incentive pay is reasonable? Bonus at target-100% or 50% times base? Stock options vs. restricted stock; SERPS; Change-in-control pay. Page 8
21. Risk Adjustments for Incentive Compensation Risk adjusted (lower) awards Mandatory Deferrals Claw backs if performance revised Set up claw back bank Longer-term performance periods Less focus on short-term performance Re-evaluate golden parachutes and golden handshakes Page 9
22. Benchmarking and Peer Group Comparisons What is an appropriate peer group? Who should decide on the final peer group? How should the peer group data be used? Compensation comparisons; Performance assessments; Should more than one peer group be used? Regional vs. national vs. international Performance vs. compensation Page 10
23. Compensation Consultants What is the role of the outside compensation consultant? Who should choose the consultant? What are selection criteria? How should their role be communicated? Page 11
24. Stock-based Compensation Which type to use? Stock options; Restricted stock; Phantom stock. How to add stock compensation to mix; Annual grants Vesting requirements Ownership guidelines. Accounting, tax, securities law issues. Page 12
25. Link Pay to Company Performance Pay and performance decisions can be planned or discretionary; Planned: Goals set in advance and pay is formula based; Discretionary: Decisions are based on a retrospective view with wide latitude. Most plans permit both approaches; IRC §162(m) limits discretion to qualify. Page 13
26. Performance Metrics and the Role of Incentive Pay Key financial measures include “R’s”: ROA, ROI, ROE, ROS, RONA, ROIC, etc. Earnings drives the numbers: EPS, earnings growth, EBIT, EBITDA, EVA, etc. Non-financial measures are: Balanced score card approach; Milestone achievement; and Industry benchmarks Page 14 Page 14
27. Summary Comments Begin with the end in mind: pay philosophy drives pay decisions. Take a total compensation view; not a piece-meal element-by-element approach; The “Grasso” lesson Link pay and performance; Do a compensation stress-test; Use tally sheets Run multiple scenarios Page 15
28. Directors' Compensation - NACD Principles Five Principles Director compensation should be determined by the board and disclosed completely by shareholders. Director compensation should be aligned with the long-term interest of shareholders. Compensation should be used to motivate director behavior. Directors should be adequately compensated for their time and effort. Director compensation should be approached on an overall basis, rather than as an array of separate elements. Page 16
29. Directors' Compensation - NACD Best Practices Best Practices Boards should: Establish a process by which directors can determine the compensation program in a deliberate and objective way. Set a substantial target for stock ownership by each director and a time period during which this target is to be met. Define a desirable total value of all forms of director compensation. Pay directors solely in the form of equity and cash – with equity representing 50 to 100 percent of the total; dismantle the existing benefit programs and avoid creating new ones. Adopt a policy stating that a company should not hire a director or a director’s firm to provide professional services to the corporation. Disclose fully in the proxy statement the philosophy and process used in determining director compensation and the value of all elements of compensation. Page 17
32. Landscape of Legal and Regulatory Changes Dodd-Frank Act: Compensation committees Compensation consultants Compensation clawbacks Say on Pay Pay for Performance disclosures Separation of roles of CEO and Chairman Page 20
33. Independence of Compensation Committee Current proxy rule: Companies must state if they have a compensation committee and disclose any committee members who are insiders or have interlocks with the compensation committees of other entities. SEC proposed rules under Dodd-Frank: Stock exchanges must require that each member of a company’s compensation committee be a member of the board of directors and be "independent." These proposed rules do not apply if the company allows the independent directors to approve compensation, only to companies that have a committee to approve compensation. In developing a definition of independence, the exchanges would be required to consider factors such as: • The board member's sources of compensation, including any consulting, advisory or compensatory fee paid by the company to the board member. • Whether the board member is affiliated with the company, a subsidiary of the company, or an affiliate of a subsidiary of the company. As with all listing standards, exchanges would need to seek the approval of the SEC before adopting them. Page 21
34. CompensationCommittee Authority and Funding SEC proposed rules under Dodd-Frank: Exchanges will be required to adopt listing standards providing that the compensation committee of a listed company: • May, at its sole discretion, retain or obtain the advice of a compensation advisor. • Is directly responsible for the appointment, payment and oversight of compensation advisors. • Must be funded appropriately by the listed company. Page 22
35. CompensationAdvisor Selection Current proxy rules: Disclose use of compensation consultants and fees paid (unless paid only for consulting on broad-based plans or the provision of non-customized benchmark data). SEC proposed rules under Dodd-Frank: Exchanges must adopt listing standards providing that a compensation committee may select a compensation consultant, legal counsel or other advisor only after considering the following five independence factors: • Whether the compensation consulting firm employing the compensation advisor is providing any other services to the company. • How much the compensation consulting firm that employs the compensation advisor has received in fees from the company, as a percentage of the consulting firm’s total revenue. • What policies and procedures have been adopted by the compensation consulting firm employing the compensation advisor to prevent conflicts of interest. • Whether the compensation advisor has any business or personal relationship with a member of the compensation committee. • Whether the compensation advisor owns company stock. The exchanges have the option to impose additional considerations. Page 23
36. CompensationConsultant Conflicts of Interest Disclosure Current proxy rules: Disclose use by the compensation committee of compensation consultants (unless paid only for consulting on broad-based plans or the provision of non-customized benchmark data). SEC proposed rules under Dodd-Frank: The proposed rules modify the existing rules to require disclosure about whether: • The compensation committee has retained or “obtained” the advice of a compensation consultant. • Management has retained the advice of a compensation consultant under certain conditions. • The work of the compensation consultant has raised any conflict of interest and, if so, the nature of the conflict and a discussion of how the conflict is being addressed. • The proposed rule would also eliminate the current disclosure exception for consultants paid only for consulting on broad-based plans or the provision of non-customized benchmark data. Page 24
37. Compensation Clawbacks “Clawback” refers to taking back monies or benefits previously awarded because of changed circumstances. Current rules (SOX -2002):Clawback of incentive-based compensation of CEOs and CFOs in the event of an accounting restatement attributable to material noncompliance with financial reporting requirements. TARP extended to numerous officers. Dodd-Frank: Strengthens SOX to require the clawback of incentive-based executive compensation, including stock options, even if no one, including the executive whose compensation is at issue, engaged in misconduct. The amounts subject to clawback are based upon the overstated results for the three years preceding the restatement date. Compensation would be recalculated according to the restated performance. SEC Action: SEC v. McCarthy, (N.D. Ga. March 3, 2011) is the second time the SEC has obtained clawback of executive compensation without alleging that the CEO in question personally engaged in any wrongdoing. The SEC's position is that the issuer's "misconduct" alone is enough, and that it need not establish any personal misconduct. The one federal district court decision that has been rendered on this issue supports the SEC position. SEC v. Jenkins (D. Ariz. 2010). Page 25
38. Say on Pay Requirements Current law: TARP companies must conduct annual shareholder say-on-pay votes. SEC final rules under Dodd-Frank: • At least every three years (starting in 2011 for large public companies), companies mustgiveshareholders a non-binding say-on-pay vote. Issuers must present four choices for the vote on the frequency of shareholder say-on-pay votes (annual, biennial, triennial, or abstain). • At least every six years, issuers mustput the say-on-pay frequency question to a nonbinding shareholder vote. • Brokers and other “street name” holders will not be able to vote to approve executive compensation in the absence of a beneficial owner direction. • Companies must address in their proxy statement's "compensation discussion and analysis" (CD&A) section whether and how they took into account the results of the say-on-pay vote. • Companies may exclude future shareholder proposals on say on pay or the frequency of say-on-pay votes only if the company adopts the provision receiving a majority vote. • The results of and the company's decision on vote frequency does not have to be reported on a Form 8-K until 150 days after the annual meeting. • Smaller reporting companies do not have to comply for two years (shareholder annual meetings occurring on or after January 21, 2013). • TARP companies do not have to comply until after TARP is repaid. Page 26
39. Golden Parachute Payments Current proxy rules: Large public companies must disclose in proxy statement a description of all compensation that may be triggered by a proposed transaction and the aggregate value of such payments, unless de minimis in amounts. SEC Final Rule: Public companies seeking shareholder approval for a merger or sale of substantially all assets are required to conduct a separate non-binding shareholder vote regarding any compensation paid to named executive officers ‘‘that is based on or otherwise relates to’’ the proposed transaction (unless these arrangements were subject to an earlier say on pay vote). • Acquired companies are required to disclose all golden parachute compensation in both narrative form and a new table (eliminates de minimis amount exclusion). • Rule does not apply to golden parachute arrangements between the acquiring company and the named executive officers of the target. • Third-party bidders need not include the "golden parachute" disclosure and approval in tender offer materials filed with SEC (as they may not have access to that information). Page 27
40. Illustrate Pay for Performance Current proxy rules: Require extensive tablature disclosure and written discussion of executive compensation and how it relates to financial performance. Dodd-Frank: SEC must issue rules that require disclosure of: • information that shows the relationship between executive compensation actually paid and the financial performance of the issuer as measured by stock price and paid dividends. • the ratio of “median employee compensation” to CEO compensation. • whether any director or employee can hedge ownership of equity securities. Page 28
41. Separation of CEO and Chairman Current proxy rules: Companies must disclose their leadership structure every year in the proxy statement and discuss why they believe the structure is appropriate. Dodd-Frank: SEC must require companies to explain in their proxy statements why the positions of chairman and CEO are separate or combined. Many shareholder advocates believe that best practices require separation of the roles of CEO and chair. Page 29
43. Succession, strategic and crisis plans Three key events should be a focus for the Board; Each plan can be linked to the executive pay package; One size will not fit all; Do the math: How much will the CIC cost? Page 31
44. Compensation Strategies for a Business Planning Event Ranking: 1.2.or 3 Priority: H-high; M- medium; L-low. Page 32
45. Major Event Planning The plan is developed independently of the compensation program; Compensation should support each of the plans: Strategic direction and pay for performance; Succession planning and promotion and retention; Crisis plans: Attract key talent for a turnaround Retention strategies to hold talent on board Page 33
46. 10 Possible Considerations Review your company’s process for determining executive compensation. If your company does not have a compensation committee,review whether it is appropriate to appoint one. Start a dialogue with your company’s stakeholders to solicit feedback on the company’s executive compensation practices. Review the total direct compensation provided to the company’s executive officers to ensure a connection between pay and performance. Assess the right mix of cash and equity Consider changing the bonus plan Assess the effectiveness of your deferred compensation plan Update your peer group and compensation benchmarking. Page 34
47. 10 Possible Considerations (continued) Consider conducting a compensation risk assessment. Assess whether your current compensation program fosters executive retention. Consider adopting a restricted share plan. For large reporting companies, review the Compensation Discussion & Analysis in your proxy statement to ensure that your company is telling a compelling story. Conduct an analysis of institutional shareholders to determine which of them follow voting guidelines provided by RiskMetrics Group, Glass Lewis & Co. or other proxy advisory firms, and which have their own voting guidelines. Review your CIC and other post-termination payments and update to corporate governance standards. Page 35
49. J. Henry Oehmann, IIIDirector – National Executive Compensation Services T: 919.881.2773E: Henry.Oehmann@gt.com Ronald D. RaxterAttorney At LawT: 919.981.4304E: rraxter@williamsmullen.com