The linkage of executive pay and shareholder value is not a simple, one-shot accomplishment that is easily identified by applying a litmus test to programs. Rather, it’s an overreaching philosophy that should be baked into all three elements of compensation decision making: diagnosing the problems to be solved; designing programs and processes; and delivering the desired results, including effectively communicating to participants and investors.
This white paper discusses how taking a more holistic approach to creating responsible and responsive executive pay programs can better position Compensation Committees to tailor practices to their organizations’ particular culture, strategy, and business model, enabling the flexibility for Directors to deviate from popular generic pay standards -and even program metrics - when needed to address new strategies or unexpected circumstances.