Pay-for-Performance: Don't Design to Standardized Tests

Pay-for-performance is an underlying concept in many executive compensation plans today.

However, many of the proxy advisory firms offer a standardized “test” or assessment of a company’s pay-for-performance that doesn’t necessarily allow for individualization or take into account the unique strategic or financial metrics that drive a particular company’s business strategy.

Managing Director Matt Turner offers some ideas on how to structure effective pay-for-performance analytics that are more likely to result in long-term value creation, rather than simply checking the compliance box.