Transcript
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"One of the things that we find that boards may not spend enough time with is the communications that go around the compensation pay decisions that we make throughout during the year. Compensation committees spend an immense amount of time reviewing, understanding, and deciding on actual pay decisions for the CEO and the executives throughout the year. Yet when we communicate those pay decisions, we on average spend maybe less than five minutes communicating. To me, compensation isn't just about the numbers, it's actually about the human behaviors that we elicit and then ultimately the motivating factors that we drive through those pay decisions. So what can boards and senior management do to effectuate a change in this particular way? |
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Do your research, understand the person, and craft a compelling story that they can recognize, know, and understand. Then, by crafting that compelling story, you can include other key things like what was the process behind the decision making? You would be surprised how many CEOs and senior executives aren't even familiar with the process that goes on behind the scenes. What's the effective date of our actual pay decision? You can include other things like what are some key focus areas for the person for the coming year? In the end, it really is that important to take the time, craft the story, and put the words around the compensation numbers. Because it ultimately alleviates pressure on your compensation program and can provide value and motivating factors to your senior executives that you may have never seen before." |
