Transcript
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"Our philosophy is to base compensation programs on a company's business strategy and on its talent management strategy. I think a lot of the people in our business use the buzzword 'strategy' because it's popular and we've always been taught that compensation is designed to support strategy. But once they mention the word, they immediately move to what they're comfortable with and what they tend to be comfortable with is what are the rules and regulations that govern compensation and what are the proxy advisory firm voting guidelines. |
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We tend to focus on the hard things, which is understanding what a company is really trying to do, understanding how it's going to make money, how it needs to manage people to have a great management team long run, what it needs to change about its business, what are the obstacles to those changes. Those things need to be considered in developing a compensation program. Almost everybody accepts the idea that business strategy ought to influence compensation. |
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Leadership strategy is more amorphous as a concept because leadership strategy is about managing human beings within a culture of a company over a long period of time where conditions change. And yet compensation through that entire period of the person's career, is the one thing that they will always come back to as the most concrete demonstration of the company's love, affection, or disdain for them depending upon how they feel that. |
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It's the one reflection of how they are valued. For us to design compensation plans that are designed to motivate human beings without taking those things into consideration and carefully thinking through how our decisions will impact their thinking as well as their behavior would make no sense at all." |
