L-Blast | July 2019
Dear All,
As summer vacations wind down and kids start getting ready to go back to school, we too are preparing for what’s ahead in the busy fall season. We have some great articles to share with you in this month’s L-Blast that we hope you find insightful.
Our first piece is a previously written NFPCC article that is one of the most read on our blog, and for good reason. The information we share in it is as critical today as it was when it was first released. In the article we highlight key insights and common misconceptions in the peer selection process that are essential to companies as they set competitive and defensible compensation levels, identify competitors and assess performance. We hope these tips are helpful as you re-evaluate your company’s peer selection process.
The next article is a great read on creating effective compensation plans for private companies. It recommends a holistic approach to total rewards that’s focused around the company’s differentiators, strengths and weaknesses, and overall strategy.
The final piece is on proxy statements and the wealth of information found in them that could be of great benefit to investors – if they know where to look. Read on to discover the 4 key areas in proxy statements that should raise concerns for shareholders and alert company leaders of what NOT to do to ensure good governance and healthy pay practices.
We appreciate each and every one of you and as always, let us know if there is a particular subject you’d like to learn more about.
Sincerely, The NFPCC Team
Comparator VS. Competitor: The Importance of Distinction for Executive Compensation
Choosing a compensation peer group can be an intense process. Companies often use peer groups to assess and maintain competitive compensation levels, identify potential competitors, assess relative performance, and defend compensation decisions. Therefore, the importance of creating the right group cannot be overstated.
READ MOREHow to Make Your Private Company Executive Comp Plans More Effective
In today’s environment for private companies, the issue of compensation is often a challenge when trying to attract and retain top talent often due to the lack of equity opportunity and participation. Although this is often seen as insurmountable, private companies should not necessarily look to public companies as “the model” when it comes to compensation design.
If the issue is only about the lack of equity opportunities, there are a number of ways that compensation plans can be designed to mirror and mimic performance triggers and other thresholds available in public companies.
These are the 4 Red Flags this Money Manager Looks for in Company Proxy Statements
Corporate proxy statements can be very rich sources of information, the kind of information that could benefit investors — if they know what to look for.
Since 2002 — the era of Enron — the Sarbanes-Oxley laws have required much more disclosure in U.S. proxies, which are provided to shareholders so they can make informed decisions about matters that will be brought up at the annual meeting. While often regarded by casual observers as monotonous compilations of facts and figures, those willing to dig deeper can instead find excellent sources of information, including executive compensation and perks.
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