When it comes to creating an executive compensation program, it can feel like there’s little gray area between giving top performers too shiny a golden parachute, with exorbitant perks, and providing the company’s leaders with the incentive they need to continue doing their best. This book gives readers the techniques and understanding they need to design a rewards strategy that will motivate performers while benefiting the entire organization.
Taking a careful look at the complicated state of executive rewards, this no-nonsense, practical guide provides readers with a complete methodology for motivating management to accomplish critical business goals. Eschewing a one-size-fits-all approach, the book uses case studies and examples to illustrate what factors should be considered—including environment, key stakeholders, people strategy, business strategy, and organizational capabilities—when designing a program that will benefit both their company and the people who fuel its success.
When it comes to executive pay, it’s hard to know what to do. On the one hand, shareholders, stakeholders, government agencies, and the general public are demanding that safeguards be erected to prevent the excesses of the recent past, such as kingly pay for mediocre performance or stock options that handsomely reward short-term gain and long-term disaster. On the other hand, an across-the-board compensation program that modestly and uniformly rewards executives is a motivation killer that can quickly kill an organization’s competitiveness.
Packed with the latest research data, dozens of real-life examples, and fifty years of total in-the-field experience, Effective Executive Compensation opens your eyes to the challenges of designing a compensation package that effectively motivates executives to achieve corporate goals. There are no shortcuts and no simple answers. But if you get it right, combining short-, middle-, and long-term rewards with the right salary and clear messages regarding performance, obligations, and business imperatives, can result in enormous payoffs. A well-designed executive rewards program not only weeds out the lackluster and the greedy, it also singles out the performers who rise above generic standards to provide the focus and drive your company needs to power ahead of the competition.
Whether you’re a human resources professional, business executive, board member, or informed investor, this sharply witty and deeply insightful guide shows you how to:
• Avoid copycatting your competitors, whose executive compensation strategy may work for them, but not for you.
• State your mission, vision, and values in a way that inspires executives to meet challenges and make good decisions.
• Decode your business strategy from three essential levels—general business strategy, value chain strategy, and specific business strategy—and use the information to develop an executive rewards program that truly aligns with business goals.
• Make sure you’re looking to the future and not stuck on what worked in the past, or focused on mere incremental improvements over prior years.
• Identify your company’s “people strategy”—its operational structures, processes, and culture—and understand its impact on your compensation strategy.
• Pinpoint the exact combination of money, mix, and messages that will comprise the most effective total rewards program for your organization.
• Use the original grahall Economic Impact Analysis (gEIA) to find potential flaws in your overall compensation program design—plus many more tips and tools for designing a superior total executive rewards strategy that benefits shareholders and stakeholders alike.
Michael Dennis Graham and Tom Roth are consultants at Grahall Partners, LLC, a consulting firm that designs total reward strategies for organizations. Both have over 30 years of experience, and together have worked on over 300 reward strategies. Michael has been a consultant and or practice director for Watson Wyatt Worldwide, Towers Perrin, the Hay Group, Arthur Andersen Worldwide, Clark Consulting, and Pearl Meyer & Partners, and is the coauthor of Creating a Total Rewards Strategy. Tom Roth has worked at J.P. Morgan, McKinsey & Co., Register.com, and Pearl Meyer & Partners. Dawn Dugan is a freelance writer based in Hinesburg, Vermont.
After the Enron, Tyco, and WorldCom debacles, we all know what can happen when executives go wild. Creative accounting, inflated pay, runaway perks—and a downward spiral of the companies they run.
Make sure your executives stay on track with a carefully crafted executive compensation strategy, one that is specifically designed to promote the kind of thinking, behaviors, and results you want to see. Effective Executive Compensation supplies a complete methodology for pinpointing the most effective total rewards strategy for your specific company.
Complete with invaluable case studies, investor alerts, and the authors’ five decades of combined experience, Effective Executive Compensation brings a piercing clarity to a complex topic that defies one-size-fits-all solutions. The book shows you how the external business environment can influence compensation, and it helps you fully understand how the mission, structure, and culture of your company determines the amount, mix, and message of your package—and guarantees that you motivate executives to achieve results that benefit everyone.