MUSINGS ON COMPENSATION AND PERFORMANCE DATE: DATE: DATE: DATE: LOCATION: LOCATION: LOCATION: LOCATION: DECEMBER 20, 2011 DECEMBER 19, 2011 NOVEMBER 29, 2011 NOVEMBER 10, 2011 Some%mes the Road Less Traveled leads to a Band of Flying Monkeys We all get bored. Most of us fill that boredom by exploring something new. OLen this leads to an exciNng new restaurant, but someNmes it means a terrible meal. SomeNmes this means meeNng new friends, other Nmes it means gePng stuck at a colleague's holiday party listening to stories about office poliNcs and sick children. In my experience, very few compensaNon professionals are also extreme sports fanaNcs. I seldom speak to someone in our industry who has recently snowboarded MORE... Prepare for Compensa%on Mee%ngs Like an NFL Broadcaster Like many of you, I have football games playing on my TV during most autumn Sunday aLernoons. Also, like most of you, I pay a lot aUenNon to the big plays, but liUle aUenNon to the broadcast itself. This past Sunday, for perhaps the first Nme ever, I focused on the incredible preparedness of the professionals producing the television events. It got me to thinking. What if compensaNon professionals prepared themselves in the same way? Our meeNngs with ExecuNve Management and more MORE... How to Explain Stock Op%ons to a Dog Stock opNons are one of the most used and least understood tools in the compensaNon toolbox. Recently, a new opNonee asked if I could explain stock opNons in a manner that even his dog could understand. I have included my answer below. "Come here Rover, I have got something to explain to you. Stock Options ....STOP scratching yourself and listen....Stock Options are an offer from the company that allows you to buy company stock at a later date. The cool thing...STOP If MORE... Goldilocks and the 3 Broadbased Stock Plans There once was a dedicated professional who was tasked with creaNng a company wide stock plan at her new company. HenrieUa Rachel Goldilocks (let’s just call her “HR Goldilocks”) had years of Human Resources and CompensaNon experience, but liUle interacNon with broadbased equity compensaNon. She searched the web and spoke to some experts on the topic. Each expert had a ton of informaNon, but many tended to discuss general trends rather than HR Goldilocks’ very specific needs. MORE... COMPENSATION CAFE COMPENSATION CAFE COMPENSATION CAFE COMPENSATION CAFE JULYDECEMBER 2011
Transcript
MUSINGS ON COMPENSATION AND PERFORMANCE
DATE:
DATE:
DATE:
DATE:
LOCATION:
LOCATION:
LOCATION:
LOCATION:
DECEMBER 20, 2011
DECEMBER 19, 2011
NOVEMBER 29, 2011
NOVEMBER 10, 2011
Some%mes the Road Less Traveled leads to a Band of Flying MonkeysWe all get bored. Most of us fill that boredom by exploring something new. OLen this leads to an exciNng new restaurant, but someNmes it means a terrible meal. SomeNmes this means meeNng new friends, other Nmes it means gePng stuck at a colleague's holiday party listening to stories about office poliNcs and sick children. In my experience, very few compensaNon professionals are also extreme sports fanaNcs. I seldom speak to someone in our industry who has recently snowboarded MORE...
Prepare for Compensa%on Mee%ngs Like an NFL BroadcasterLike many of you, I have football games playing on my TV during most autumn Sunday aLernoons. Also, like most of you, I pay a lot aUenNon to the big plays, but liUle aUenNon to the broadcast itself. This past Sunday, for perhaps the first Nme ever, I focused on the incredible preparedness of the professionals producing the television events. It got me to thinking. What if compensaNon professionals prepared themselves in the same way? Our meeNngs with ExecuNve Management and more MORE...
How to Explain Stock Op%ons to a DogStock opNons are one of the most used and least understood tools in the compensaNon toolbox. Recently, a new opNonee asked if I could explain stock opNons in a manner that even his dog could understand. I have included my answer below.
"Come here Rover, I have got something to explain to you. Stock Options ....STOP scratching yourself and listen....Stock
Options are an offer from the company that allows you to buy company stock at a later date. The cool thing...STOP If MORE...
Goldilocks and the 3 Broad-‐based Stock PlansThere once was a dedicated professional who was tasked with creaNng a company-‐wide stock plan at her new company. HenrieUa Rachel Goldilocks (let’s just call her “HR Goldilocks”) had years of Human Resources and CompensaNon experience, but liUle interacNon with broad-‐based equity compensaNon. She searched the web and spoke to some experts on the topic. Each expert had a ton of informaNon, but many tended to discuss general trends rather than HR Goldilocks’ very specific needs.MORE...
Equity Compensa%on Data for Start-‐ups and Other Private CompaniesDuring the month of November I’m going to focus on my equity compensaNon roots. With both the IPO and M&A markets once again starNng to gain aUenNon, we can start by discussing a recent survey on equity compensaNon at private companies.The NaNonal Center for Employee Ownership, (www.nceo.org) just released their 2011 Private Company Equity CompensaNon Survey. This survey is unique because it focuses exclusively on data from more than 200 privately held companies. Given the MORE...
Compensa%on In the Eye of the TornadoIn a world of swirling regulaNons, opposing forces of needs versus budgets and increasingly pressing deadlines, it is far too common to get caught up in the tornado that is our everyday work. Generally, when a tornado comes the best plan is to get out of its way. When that is not possible and the tornado takes hold, our survival insNncts immediately look for a way out. I am here to propose a beUer plan. Think about it. What happens as you move towards the edges of a tornado?MORE...
Compensa%on: The Word May Not Mean What You Think it MeansWhat does “compensaNon” mean? Those of us who work as compensaNon professionals consider it a posiNve, professional word that speaks to people gePng paid for services, effort or performance. Like many words, compensaNon actually means something else enNrely.From the Collins World English DicNonary
1. the act or process of making amends for somethingMORE...
Either Put Me in Charge or Let Me Be a Lackey. I'm Fine with Either, But I Can't Do Both.A friend recently updated their status with the Ntle to this arNcle. Ironically, I saw it just as I got off a call with a client who was explaining that somehow she was expected to serve as both the strategic visionary and tacNcal processor for her company’s mulN-‐naNonal LTIP programs. The simple request in my friends status update seemed reasonable, well thought-‐out and familiar. As we traverse the crags ofMORE...
How Much to Keep Your Mouth Shut?How does compensaNon interact with reputaNon? Let me count the millions of ways. The calculus of reputaNonal damage can be more intertwined than we account for in our current severance agreements.Recent news arNcles have discussed comments by Yahoo’s deparNng CEO, Carol Bartz. Famously, or infamously, she declared in a media interview that she disagreed with her terminaNon and felt that perhaps the company had not been completely MORE...
Compensa%on Crack the Whip! Managing the Velocity of ChangeI am sure that when some people saw this Ntle, their first thought was of the mighty compensaNon professional standing above the fray, bullwhip in hand, direcNng execuNves and employees to do what is required to ensure their company success. But let’s be realisNc, that’s probably not going to happen. More importantly, in this case I am talking about an enNrely different type of “crack the whip.” Changes to corporate strategy, compensaNon rules, market forces and other influences mean MORE...
Say on Pay – The Excep%on Proves the Rule?Say on Pay is currently the largest driver of change in the world of execuNve compensaNon. This provision of the Dodd-‐Frank Act was the talk of the media and consulNng firms during the 2011 proxy season. And it will certainly be a major force as we prepare for the 2012 proxy season. This focus is interesNng since shareholders overwhelmingly supported execuNve say on pay proposals this past year. The majority of pay programs received an average of more than 90% support, and less MORE...
Cheater Cheater Integrity Eater: Teachers and Pay for PerformanceSome people say the recent cheaNng scandal in Atlanta area schools gives rise to the ugly side of performance-‐based pay. CriNcs loudly shout that teachers cheaNng on standardized test scores only to earn beUer compensaNon, proves that pay for performance doesn’t work. Equally loud criNcs on the other side of the argument shout that pay without performance has been proven, over many years, to work when used properly. Both sides believe that our priority should be educaNng our MORE...
How is Pay for Performance like Driving a Fire Truck?San Francisco has lots of tall buildings, so we need those cool ladder fire trucks that you see in the cartoons. There is a firefighter in the front seat and another with a steering wheel in the back. As one drove by on an emergency call my nephew asked me who was in charge steering the truck. It took me a second, but my answer was, “both.”As so many things tend to do, this immediately popped into my mind when discussingMORE...
Defining Pay for a Compensa%on UnicornAt a recent client engagement, the HR department described a specific posiNon they were having a hard Nme trying to fill. The posiNon was incredibly specific and required knowledge and a skill set that was nearly impossible to conceive. They told me that they had been trying to fill the posiNon for almost two years. During that period, the department in need had created “beUer and more specific definiNons.” As I probed deeper it became clear that this posiNon was more than difficult to fill, it was MORE...
How Much Money to do a Job You Don’t Want?Companies are trudging their way through this slow and oLen painful economic recovery. ReorganizaNon has become a mantra of survival, but where do your employees and their compensaNon fall into the mix? Recently both friends and clients have been telling me about their troubles at work. Many aren’t really complaining about their compensaNon, they are griping about the job they are doing for the pay.
MORE...
Equity Compensa%on: Gi\, Reward or Lease?Skype as been vilified for buying back shares from vested and exercised stock opNons (see details here and here). The acquisiNon of Skype by MicrosoL increased the stock value enormously. Ex-‐employees complained that the company required the return of shares exercised, while only providing the original exercise cost as repayment. In the paradigm established during Equity CompensaNon’s Golden Decade (the late-‐1990’s), this type of provision was nearly unheard of. In the more than 10 yearsMORE...
