New WorldatWork Publication Demystifies Executive Pay Understanding Executive Compensation: A Practical Guide for Decision Makers
May 27, 2009 – Washington, D.C. – WorldatWork, a global association of human resources practitioners, has just published a new book to help demystify executive rewards. ”Understanding Executive Compensation: A Practical Guide for Decision Makers” was edited by Irving S. Becker and William M. Gerek of Hay Group.
While the media’s fascination with executive pay continues to fill headlines, compensation committees, legislators, regulators, labor leaders and other stakeholders are all participating in a wide-ranging debate on the pay programs of top executives. But the field of executive compensation can be quite complex, with various business, competitive, design and regulatory considerations involved.
“Understanding Executive Compensation: A Practical Guide for Decision Makers” is not about the controversies surrounding executive compensation today; rather, it focuses on the fundamentals of executive compensation design and explains them in non-technical, non-legal language. Although the book is written from a U.S. viewpoint, most of the topics and principles addressed are critical for any organization, regardless of location. The chapters of this 250-page book are grouped into three sections:
Part 1
“Executive Pay Design and Strategy” covers the basic components of pay – base salary, annual incentives, equity and non-equity long-term incentives. It also addresses peer group selection, performance measurement, competitive benchmarking, executive benefits, equity retention and employment agreements.
Part 2
“Governance and Compensation Committee Initiatives” provides an overview of executive compensation governance issues and discusses the tools compensation committees have at their disposal in overseeing executive compensation. Several chapters examine succession planning and board compensation.
Part 3
“Executive Compensation in Special Settings” tackles the compensation issues that arise in extraordinary situations, such as IPOs and mergers and acquisitions. Also included are chapters on executive and board compensation in not-for-profit organizations, as well as a chapter on international compensation.
Quotes: “This book is a must read for every compensation committee member,” said Don B. Lindner, CCP, senior executive compensation practice leader, WorldatWork. “While there are many players involved in designing executive pay packages, ultimately, compensation committee members are responsible for reviewing and approving executive pay programs. Committee members provide the critical review to ensure that a plan does not promote excessive risk, and is aligned with a company’s business and talent retention strategy.”
“It is an unprecedented time for executive pay, and every component of the compensation program really needs to make sense relative to each company’s operating challenges and strategy,” said Irving S. Becker, National Practice Leader, Executive Compensation Practice, Hay Group. “In this book we have tried to help practitioners ensure that their programs establish a consistent and transparent connection between what executives realize in compensation and the value they create for their companies.”
“If we’ve learned anything from the last several months of executive compensation scrutiny, it’s that we must get back to the basics of executive pay programs,” said William M. Gerek, U.S. Regulatory Expertise Leader of Hay Group’s executive compensation practice. “Going forward, the focus should be on the ‘what’ and ‘how,’ not the ‘why.’”
WorldatWork (www.worldatwork.org) is a global human resources association focused on compensation, benefits, work-life and integrated total rewards to attract, motivate and retain a talented workforce. Founded in 1955, WorldatWork provides a network of more than 30,000 members in 100 countries with training, certification, research, conferences and community. It has offices in Scottsdale, Arizona and Washington, D.C.
The WorldatWork group of registered marks includes: WorldatWork®, WorldatWork Society of Certified Professionals®, Alliance for Work-Life Progress® or AWLP®, Certified Compensation Professional® or CCP®, Certified Benefits Professional® or CBP, Global Remuneration Professional or GRP®, Work-Life Certified Professional™ or WLCP®, Certified Sales Compensation Professional™ or CSCP™, Certified Executive Compensation Professional or CECP™, workspan®, and WorldatWork ®Journal, and Compensation Conundrum®.
About Hay Group
Hay Group is a global consulting firm that works with leaders to transform strategy into reality. We develop talent, organize people to be more effective, and motivate them to perform at their best. With 88 offices in 47 countries, we work with over 7,000 clients across the world. Our clients are from the private, public, and not-for-profit sectors, across every major industry and represent diverse business challenges. Our focus is on making change happen and helping people and organizations realize their potential.
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