Executive & Director Pay

Our assistance begins with a thorough understanding of the company, its business strategy, and the socioeconomic factors impacting its industry.

When reviewing, or developing a compensation philosophy, we work collaboratively with the Board, Compensation Committee, and executive team to understand the company’s history, business strategy, key development milestones, and major stakeholders- important factors in understanding the business context underpinning compensation philosophy and strategy.

Your company’s compensation philosophy outlines how you want to remunerate your executives and why, emphasizing the alignment of corporate culture, business strategy, and key stakeholders with the pay package structured for executives.

We advise on your company’s compensation strategy, driven by its compensation philosophy, including:

• The peer group/market against which your company should benchmark its executive and non-executive director compensation arrangements
• The desired competitive positioning against these peers/market for each element of pay
• The desired performance alignment of pay and mix of fixed and variable compensation

We support our clients in articulating a compensation philosophy that considers the above factors and will ultimately be acceptable to key shareholders and defensible to other stakeholders.

Following the development of our recommended compensation peer group(s), we conduct a comprehensive analysis of competitive pay levels, including the following elements of pay:

• Salary
• Short-term incentive awards, including min, max, and target levels, scorecard categories and weightings, and the prevalence of key performance indicators
• Equity-based incentive awards and other forms of long-term incentives, including the type and prevalence of equity incentive plans in use in the peer group and target award levels, including both target value and individual and aggregate burn rate
• Retirement saving programs and other benefits and perquisites

Working with key members of the Board, Compensation Committee, and management team (the project team), we assist our clients with the design of short-term incentive plans (STIPs) and long-term incentive plans (LTIPs). These plans can be exclusive to the company’s executives and/or used to engage all levels of the employee population.

Our process for incentive plan design includes:

• Consideration of our client’s compensation philosophy and strategy
• Target incentive plan opportunity befitting both the client’s compensation philosophy and competitive market practice
• Identification and selection of value drivers (performance metrics) that can be impacted by incentive plan participants and overall line of sight to shareholder value
• Consideration of financial impact, tax considerations (including the ability to defer taxation of awards, accounting treatment, etc.)
• Administration guidelines, including treatment upon termination, leave of absence, change of control, etc.

Where appropriate, we leverage the work performed for our clients on their compensation philosophies and compensation peer groups to benchmark the non-executive director compensation practices, including:

• Board member retainer
• Non-executive Chair retainer
• Committee retainer and Committee Chair retainer
• Board and Committee meeting fees
• Prevalence and value of equity-based incentives
• In special situations, Special Committee compensation arrangements, inclusive of pay level and structure and disclosure considerations

We provide compensation governance checkups to provide the Board/ Compensation Committee with insights on trends and best practices in compensation governance.

Review guidance provided by major institutional investors, proxy advisory firms, and other governance organizations and discuss how they apply to our client's given industry trends and stage of development considerations. Topics covered can include:

• Board member and Committee independence
• Participation of non-executive directors in equity-based incentive plans
• Shareholder votes on executive compensation (Say-on-Pay)
• Share ownership requirements
• Clawback provisions for the recoupment of incentive compensation
• Anti-hedging policies