CAP partners Bertha Masuda and Susan Schroeder discuss essential components to building robust long term and short term incentive plans as well as what companies overlook when developing incentive plans for their employees

Stock price growth? Meeting the business plan? Beating external expectations? Long-term stability? Companies must consider success across multiple fronts, and boards of directors play a role in defining success by working with management to set the strategic plan and by overseeing how the company progresses toward the achievement of the plan.

Incentive plans are foundational to motivating the senior management team to achieve the goals of a company’s strategic plan. Determining how to best measure and reward performance against these goals is key to designing effective incentive compensation programs that ensure proper alignment of pay outcomes with various degrees of suc- cess against the plan.

To determine how board members measure performance and incorporate it in their company’s incentive compensation plans, Corporate Board Member and Compensation Advisory Partners partnered to survey more than 250 public company directors. In this report, we present our findings and share our perspective on these key issues.

Download the PDF to read the full report.

Compensation Advisory Partners, Equity Methods and PayFactors are sponsoring a long-term incentive (LTI) survey. The purpose of this survey is to provide insight on LTI design features and pay levels below the most senior executive positions as this type of information is challenging to obtain from published survey data. We want to provide a simplified output to help participants understand the typical LTI award opportunities and vehicles used at different salary levels within an organization.

This LTI survey will focus on the following by salary level:

  • LTI target opportunity levels
  • LTI mix
  • Design features of LTI vehicles
  • Stock ownership guidelines

Click here for a summary of topics covered.

The survey will take approximately 30 minutes to complete. Submission deadline is Friday April 5, 2019. All responses will be kept confidential and participants will receive a complimentary report on survey findings.

If you have any questions, please contact surveys@capartners.com and someone will respond within 1 business day.

Click here to participate

Short-term, cash incentives continue to dominate the incentive-pay landscape at nonprofit/government organizations according to salary and compensation survey research released in May 2018 by WorldatWork in partnership with Vivient Consulting.

“U.S. nonprofit organizations continue to make significant use of short-term cash incentives to motivate and reward employees. Long-term incentive (LTI) use is still a little-used compensation element, but prevalence increased modestly in 2017 and may signal an emerging trend,” said Bonnie Schindler, partner and co-founder of Vivient Consulting.

Additional Key Findings from the WorldatWork-Vivient Survey

Nonprofit/Government Compensation Survey Results:

  • Nonprofit and government organizations favor simplicity by offering a limited number of STI plans. Of the respondents, more than 75% reported having three or fewer STI plans in place.
  • By far, the most common type of STI plan at nonprofit and government organizations continues to be an annual incentive plan (AIP). However, prevalence of AIPs dropped to 77% in 2017 from 86% in 2015

The compensation survey Incentive Pay Practices: Nonprofit/Government was conducted in December 2017 among WorldatWork members. The salary and pay survey is the third edition for nonprofit/government entities with the last report data released in 2015.

Short-term, cash incentives continue to dominate the incentive-pay landscape at private companies according to salary and compensation survey research released in May 2018 by WorldatWork in partnership with Vivient Consulting.

“Spending on short-term incentives (STIs) increased modestly at private companies from 2015 to 2017, which reflects the tight labor market and competition for talent,” said Bonnie Schindler, partner and co-founder of Vivient Consulting.

Additional Key Findings from the WorldatWork-Vivient Survey

Private Company Compensation Survey Results:

  • Spending on STIs increased to 6% of operating profit at median, from 5% in prior years.
  • The prevalence of exempt, salaried employees and nonexempt (salaried or hourly) employees included in annual incentive plans increased in 2017. The biggest jump occurred for nonexempt employees. Approximately two-thirds of nonexempt employees are eligible for annual incentives, up from half in 2015.
  • The majority of respondents consider their annual incentive plans to be only moderately effective, with plan communication, the level of discretion, goal setting and the risk-reward trade-off noted as areas for improvement.

The compensation survey Incentive Pay Practices: Privately Held Companies was conducted in December 2017 among WorldatWork members. The salary and pay survey is the fifth edition of the compensation report produced for privately held companies with the last report data released in 2015.

Dan discusses compensation committee practices and how to take the process to the next level as well as new ideas for performance-based LTI.

Principal Bonnie Schindler discusses the compensation survey research conducted by Vivient and WorldatWork around incentive pay practices for private, non-profits and government entities.

Upcoming Events See All

Jul 12, 2020

WorldatWork: Executive Compensation Forum

Las Colinas, TX

Partner Dan Laddin will participate in a forum focusing on shareholders’ expectations and what shareholders prioritize when analyzing executive and board compensation. Click here…
  • Daniel Laddin

Sep 16, 2020

Corporate Board Member: Compensation Committee Summit

New York, NY

Partner Kelly Malafis explores best-practices for communications between HR and Compensation Committees to resolve complex human capital issues within various levels of the workforce.…
  • Kelly Malafis

Sep 16, 2020

Private Company Director: Private Company Governance Summit 2020

Washington, D.C.

Partners Bertha Masuda and Sue Schroeder will discuss strategies for building and maintaining a private board to ensure proper alignment between stakeholders, board, and…
  • Bertha Masuda
  • Susan Schroeder