Our Approach

In today’s environment, compensation committees and executives want to ensure their executive compensation advisor is intimately familiar with the company’s organization, business objectives and strategic challenges, yet available to provide independent advice. To that end, Compensation Advisory Partners focuses on providing personalized and responsive service to a select group of clients where we believe we can have an impact.

Our client-focused approach is demonstrated by our long-standing relationships – we have worked with most of our clients for many years and have served not only as technical experts, but as trusted advisors. Our collaborative approach is supported by rigorous analytics and extensive real-time experience working with companies in many industries.

We believe that having the consultant work for the Committee and with management ensures that our advice and recommendations reinforce the client’s business strategy, organization and management style, and are consistent with the principles of sound corporate governance and objective advice to the Committee.

In our role as advisor to the Committee, we typically

  • Report to the Committee Chair
  • Attend scheduled Committee meetings and conduct preparatory sessions with the Committee Chair
  • Have access to the Committee Chair and Committee members between meetings
  • Are available to participate in executive sessions with the Committee, as requested
  • Address engagement letters to the Committee Chair to document Committee approval of the scope of work and fees
  • Educate directors on trends and key issues in the field as requested

We have access to extensive data on executive compensation practices and trends. We maintain relationships with dedicated professionals with up-to-date technical expertise in practices related to executive compensation. Our team has conducted numerous proprietary studies on pay and design best practices among high-performing companies. More importantly, in today’s ever-changing environment, we can speak to what companies are doing on a real-time basis.

Under our client-focused approach to consulting, we work with our clients throughout the year to keep abreast of their business and executive compensation issues and advise on external trends in order to meet the full range of their needs. Services provided include:

Compensation Committee Organization

  • Review and Update Committee Charter
  • Establish Annual Calendar
  • Develop Committee Meeting Agendas
  • Align Calendar and Agendas with Committee Charter
  • Attend Regular Compensation Committee Meetings
  • Keep Committee Apprised of Developments in the Regulatory Environment
  • Attend Pre-Meetings as Required
  • Provide Updates on Trends and Best Practices

Compensation Strategy Development

  • Guiding Principles and Philosophy
  • Peer Group and Market Reference Definition
  • Market Comparisons and Benchmarking
  • Pay Positioning
  • Pay Mix Issues:  Fixed/Variable and Cash/Equity
  • Performance Metrics
  • Payout Curves and Leverage

Competitive Benchmarking

  • Define Competitive Pay Levels
  • Assess Relationship between Pay and Performance
  • Apply models used by Advisory Firms

Annual Incentive Plan Design

  • Participation
  • Size of Awards
  • Performance Metrics / Goal Setting
  • Pool Funding Decisions
  • Payout Curves and Leverage
  • Allocation Process
  • Cost Modeling

Long-Term Incentive Plan Design

  • Participation
  • Vehicle Selection and Mix
  • Size of Awards and Valuation
  • Performance Metrics / Goal Setting
  • Vesting; Other Terms and Conditions
  • Cost Modeling
  • Tax and Accounting Impact
  • Dilution and Overhang
  • Plan Approval Process
  • Wealth Creation / Tally Sheets

Board of Directors Compensation

  • Retainers and Meeting Fees
  • Equity Programs
  • Deferred Compensation
  • Lead Director and Non-Executive Chairmen Pay Practices

Regulatory Requirements

  • Financial and Tax Implications (162(m), 490A, FAS 123R / ASC718)
  • Potential Impact of New Legislation / Proposals
  • Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
  • Sound Incentives in Financial Institutions
  • Risk Assessments
  • Federal Reserve Regulatory Oversight

Disclosure

  • Executive Compensation Disclosure Approaches
  • Drafting the Compensation Discussion & Analysis (CD&A)
  • Proxy Statement Review and Other SEC Filings
  • Say-on-Pay Proposals
  • Approval of Incentive and Equity Plan Proposals
  • Proxy Advisor and Institutional Investor Policies

Strategic Transactions

  • Mergers & Acquisitions
  • IPOs and Spin-Offs
  • Change in Control
  • Divestitures
  • Severance & Retention

Other

  • Board, Committee and CEO Performance Evaluations
  • New Director Training Sessions on Market Developments in Executive Compensation
  • Stock Ownership Guidelines
  • Employment Contracts
  • Recoupment Policies
  • Benefits and Perquisites
  • Executive Retirement Plans