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One of the surest signs of spring — perhaps more so in our variable-weather world than flowers budding and geese flying north — is the onslaught of news stories about executive pay packages. Each spring, public companies release compensation data for the top five named executive officers, and the news stories quickly follow. Who is the highest paid CEO? Is pay really linked with company performance? Whose equity grants are worth the most? While public companies occupy the limelight and set the standard for what people think about executive pay, the number of United States-based public companies have declined to about 3,600. Private companies and nonprofits outnumber their publicly-traded peers, and offer compelling executive pay packages without fanfare and without publicly-traded stock. While the lack of publicly-traded stock creates challenges, particularly with regard to long-term incentives (LTIs), private companies and nonprofits can use a number of strategies to develop thoughtful and creative executive pay programs, and deliver competitive compensation.
Originally published in the June/July 2020 edition of WorldAtWork’s WorkSpan magazine.
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