
Dan Walter, Performensation
In
the good old days, determining total compensation was fairly easy. Always
wrong, but easy. For any given year you just added up what you paid people in
base pay, what you expected to pay them in bonuses, other cash incentives, and
the Fair Value (or a reasonable equivalent) of equity at the time it was
granted. Public companies disclosed this information and shareholders were left
to make their own projections from there. There has been a fairly rapid
movement to a measurement called “realizable pay” (the current/recent value of
outstanding pay). This metric may also be combined with “realized pay” (the
value of exercised or otherwise delivered pay) in an attempt to provide a more
accurate picture of total compensation and its alignment to company
performance.