• Equity Compensation – Restricted Stock Shares, Always a Great Tool, Sometimes

    Stickman - Equity Compensation - RSS
    Dan Walter, Performensation

    Restricted Stock Shares (RSS), often called Restricted Stock Awards (RSA) or even more simply Restricted Stock, have been used longer than any other equity compensation instrument. Companies have used variations of restricted stock for almost as long as stock has existed. While ISOs and NQSOs are “appreciation only” awards, RSSs are Full Value Awards (FVA). RSS awards are unique in that they require the issuance of real stock as of the date of the award. Restricted Stock is a confusing term since it can refer to at least three major categories of stock. 1) Stock issued prior to registration with the SEC under the 1933 Act; 2) Stock issued to affiliates of the company who are subject to Rule 144 filings; 3) Stock that must meet time and/or performance conditions before it can be freely transferred. For the sake of this post, I will only cover the last of these.

  • CFO Corner: What the Heck is Realizable Pay (and why you need to know…now)

    Stickman - Realizable Pay
    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.

  • CFO Corner: UK Shareholder Spring was Barely a Fling

    Stickman UK Shareholder Spring

    Dan Walter, Performensation

    In recent presentations I have heard several compensation professionals from the UK refer to their “Shareholder Spring” of 2012. The reference is to the raising of voices from shareholders. While we all love a little hyperbole, I believe that their Shareholder Spring was barely a fling. The UK’s Shareholder Spring led to a lot of posturing, but as of yet, the player and rules of the game are still familiar.

  • CFO Corner: Equity Compensation – The Ups and Downs of ISOs

    Stickman ups and downs of isos
    Incentive Stock Options are a great place to start talking about equity compensation. ISOs are “appreciation-only” vehicles, meaning they have direct value to employees only if the stock price appreciates above the initial grant price. Other common appreciation-only instruments include NQSOs and SARs (to be covered in future posts). If you understand ISOs, you can easily understand other appreciation instruments.

  • CFO Corner: Beyond TSR (Total Shareholder Return)

    Stickman Beyond TSR

    Dan Walter, Performensation

    Executive Pay that Works for Shareholders and Companies

    Like Milli Vanilli in 1990, Total Shareholder Return (TSR) is currently all the rage in executive compensation plans. And, like Milli Vanilli, as entertaining as TSR is to some, it may prove to be a less than stellar performer for most. Of course, unlike the disgraced pop-stars, TSR is unlikely to disappear from view any time soon.

  • Cash is King. Who are the rest of the royals?

    Stickman Cash is KingBy Dan Walter, Performensation

    In the mighty kingdom of compensation, cash is king. Cash holds this majestic position through a family line that stretches back hundreds, if not thousands, of years. Like any monarch, King Cash has a retinue of supporters, all with their own long histories and stories of power.

    I will be providing a new series of posts on Payscale’s Compensation Today blog. These posts will be focused on explaining the King’s court as well as the strategies, tactics and technical aspects of how to best use these players in the game of chess that is total rewards.

  • Non-profits: Find Safe Harbor in the Talent Wars

    Be Smart about Compensation With Good Data

    We're the experts in compensation data, so it's no surprise that we field compensation questions from private corporations all day long. What's new is that more and more non-profit organizations are coming to us make sure they find safe harbor in their executive compensation decisions. They look to us because our data and tools can help prevent the imposition of severe tax penalties applied by the IRS to punish executive compensation they deem excessive.

  • Small Company CEOs Work Hard and Earn Less

    Less Pay for Small Company CEOs

    5489061293_a9b463ae1fThanks to bank bailouts, Occupy Wall Street and other news, there is a lot of attention on CEO pay right now, especially as it compares to the average wages of employees. Whether you agree or disagree with a CEO making high wages at Fortune 1000 companies, it’s hard to argue that CEOs and other C-suite employees at small organizations are being overpaid.

  • Bonus Plan for Executives

    Executive Bonus Planning: An Overview of Short-Term Incentives

    By Bridget Quigg, PayScale.com

    Executive pay planning can be an intimidating process, even for seasoned HR professionals. In the upcoming series of posts on the topic, we hope to enlighten you on the basics of executive pay, as well as get into the details on topics like restricted stock grants and deferred compensation. We’ll start with this up-close look at short-term incentives, or a bonus plan.

  • The Basics of Executive Compensation

    The ABCs of Executive Pay

    What are the ABCs of executive pay and why is it so different from what the rest of us get?

  • Ideas for Executive Compensation

    Ideas for Executive Compensation Q&A Session – Expert Ideas for Executive Compensation

    The following is a transcript of the question and answer session that followed PayScale’s webinar, How to Develop Your Executive Pay Strategy. The topics covered in these questions include adjusting to a down economy, finding salary data for a unique industry and total cash compensation. Answers are provided by author Sharon Koss, SPHR, CCP, president of Koss Management Consulting
  • How to Design an Executive Compensation Policy

    Executive Compensation Policy How to Design an Executive Compensation Policy

    By Staff Writer

    If your company is looking to bounce back from a drop in profits or handle a growth spurt, you may be in the market for fresh talent at your executive level. What’s the best way to approach salary negotiations during the executive hiring process?

  • Executive Compensation – Free HR Questions and Answers

    Executive Compensation Executive Compensation: Qualifying and Compensating the Top Levels of Your Organization

    The following is a transcript of the question and answer session that followed PayScale’s webinar, Executive Pay 101: What You Need to Know. The topics covered include qualification and generalized methods of compensating top level executives, vice president and above. Answers are provided by Sharon Koss, SPHR, CCP, president of Koss Management Consulting.

  • A Look at Executive Pay Limits

    Executive pay limits Do You Support Executive Pay Limits?

    By Staff Writer

    In the chaotic and frightening times we’ve all stumbled into, it sounds nice to get back at someone, something, an institution, anything, for what has happened to many people’s 401Ks, homes and jobs. Who can we point a finger at?

    Of all the options, the one that has received a lot of media attention is executive compensation. Salary data abounds online, pointing out that executives' motivations are misdirected, resulting in an overpaid, profit-driven culture where the guy or gal in charge only looks out for number one. What do you think is a smart way to change the status quo?

  • Merrill Lynch Executive Compensation Bonuses

    Executive Executive Compensation Bonuses Gone Over the Top: Ken Lewis, CEO of Bank of America, Under Serious Scrutiny

    In September of 2008, Merrill Lynch admitted that it couldn’t pay its bills anymore. But, just before it ended its final quarter of business, Q4 of 2008, Merrill Lynch gave out nearly $4 billion in executive compensation bonuses.

    Come again? Say what?

  • Executive Compensation Package Analysis

    Execcomp Civilization and Impulse Control: An Executive Compensation Package Analysis

    Over the years, this view of civilization has stuck with me: Civilization is defined as impulse control. If this is so, how does outlandish executive compensation fit into civilization?

    The poster illustration for uncivilized behavior, it seems, could be the greed of outrageously excessive executive compensation packages. Richard Fuld at Lehman Brothers, for example, made $484 million in 8 years as he ultimately drove his company out of existence.

  • Effect of Executive Compensation Cap

    Compensationcap How Will Obama’s Executive Compensation Cap Affect Companies in Trouble?

    It’s official. The unethical use of bailout money that so many of us feared would come when the government wrote big checks to save our economy has arrived. In fact, according to a recent L.A. Times article, "Wall Street Finds Ways Around Executive Pay Caps," $20 million of the bailout money handed out last year by the Bush administration went to executive compensation bonuses. These, mind you, are top executives at companies that failed. Do you think they are inspired to do better work now that they were rewarded for running their businesses into the ground?


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