Institutional Shareholder Services (ISS) launched a two-week consultation on potential updates to its benchmark voting policy for 2018. The comment period will allow all interested parties – including companies, investors, advisors, and others – to provide their perspective...
The Evolution and Current State of Director Compensation Plans
Today we are sharing this article from the Harvard Law School Forum on Corporate Governance and Financial Regulation with helpful information to our readers. Even though director compensation programs look quite similar from company to company, the primary difference between...
L-Blast | September 2017
"True heroism is remarkably sober, very undramatic. It is not the urge to surpass all others at whatever cost, but to serve others at whatever cost.” - ARTHUR ASHE Dear All, That quote holds true even weeks after the catastrophic effects of Hurricane Harvey and reminds us...
NFPCC Original Article: Where Has All The Merit Gone?
It’s that time of year again as we enter the final quarter of a compensation cycle and the beginning of a new football season, with renewed hopes that this is your team’s year. With this entry into salary planning time for the general employee population, HR departments are...
Business Wire: Activist Investor Challenges Executive Pay Accounting at T-Mobile
We found this great article written by Business Wire, and we wanted to share it with our readers: Activist Investor Challenges Executive Pay Accounting at T-Mobile July 31, 2017 - WASHINGTON - (BUSINESS WIRE) - Earlier today, the CtW Investment Group petitioned the SEC to...
NFPCC Original Article: CEO Pay Ratio Caps Will Not Work
Just last month, NFPCC’s “CEO Pay Ratio - Winter is Coming” article summed up the latest on the controversial pay ratio rule. This month, we dive into a related subject by taking a peek back in time to the mid-1970s. This past week, a 1977 Wall Street Journal article was...
Chris Crawford Quoted in Dallas Morning News Article Featuring Trends from NFPCC’s Compensation Study
NFP Compensation Consulting performed a detailed study of compensation awarded to chief executives at North Texas' largest publicly traded companies, based on 2016 revenue. This article written by Karen Robinson-Jacobs discuss the main trends found in our study and features...
NFPCC Original Article: CEO Pay Ratio – Winter is Coming
“Winter is coming” – a household phrase for those familiar with the Game of Thrones television series and book adaptation. Applied in the context of corporate issuers – CEO Pay Ratio is coming! Are you prepared? Are you familiar with how to run the calculation? Do you...
Join us at the CRTRA Conference: What Reward Data is Important to You? Roundtable | How to Impact Congressional Change for HR
Chain Restaurant Total Rewards Association's 2017 Annual Conference Hilton Gaslamp 401 K St. San Diego, CA 92101 Session 1: Roundtable: What Reward Data is Important to You? July 26, 2017 3:00pm Speakers: Liz Mayo, Director, NFP Compensation Consulting and Susan Douglas,...
NFPCC Original Article: Upcoming HR/Reward Legislations and How You Can Impact Congress
Federal legislation impacts all citizens. This is especially the case for rewards professionals, as they must navigate and implement rewards programs that are subject to new legislation once it becomes law. Last spring, when WorldatWork held its first Legislative Summit in...
Why CEOs Aren’t Overpaid
While CEO pay has been a hot topic for many years, it has come back into the spotlight after the House of Representatives recently voted to repeal the Dodd-Frank legislation. Critics are complaining that transparency is necessary to lower CEO pay, but we are sharing this Fortune...
Dangling the Carrot: How Banks Can Approach Incentive Compensation
Carefully drafted incentive compensation plans can improve executive loyalty. It's a good idea to make sure your executives are protected, and there are a lot of variables to consider in putting together incentive compensation plans. This article discusses options like cash or...
Only 7 Say-on-Pay Failures So Far
The Say-on-Pay failure rate is the lowest it's been since voting began in 2011. According to this Semler Brossy chart, the failure rate is at 0.6%, and only seven Russell 3000 companies have failed thus far in 2017. Need help preparing for the next annual say on pay vote? Ask...
5 Governance Experts Share Perspective On Boards
We found and wanted to share this recent Forbes article rehashing an interesting discussion from five leading governance experts on the topic of effective governance strategies. While concluding that best practices are not “one size fits all”, the article highlights some key...
Media Bias in CEO Pay
On March 13, 2017, Fortune.com published an article comparing compensation of Marissa Mayer, Yahoo’s CEO, and her replacement, Thomas J. McInerney. This article, titled “Yahoo’s new Male CEO Will Make Double Marissa Mayer’s Salary,” reports limited information and...
The Evolution of Corporate Governance (Podcast)
We want to share this podcast interview with our readers. Ann Yerger, a fellow expert in our industry, shares about the evolution of corporate governance that she has seen over her 30-year career. Listen to the audio interview...
A Surprising Definition of Board Independence
Board independence is an increasing focal point for investors, proxy advisors and corporate issuers, especially now as companies go through their annual shareholder meetings. With that in mind, we thought this article from the Financial Times relevant for our community as it...
Here’s Why Executive Pay Gets a Bum Rap
We found this article and thought our readers might be interested in why executive pay gets a bad rap. The media typically looks at a total compensation number and reports it without the appropriate context, so it’s easy to understand why executive pay is often...
The “Buy Side” View on CEO Pay
This article is about executive compensation being highly controversial with most Americans feeling that CEO compensation among large publicly traded corporations is a problem. This article goes in depth to discuss how executive compensation practices have changed in the recent...
U.S. Board Practices
Harvard Law's Board Practices Study focuses on traditional board issues and also those which have recently heightened shareholder interest in the boardroom. Governance continues to evolve, but investor focus has been placed on the role of the board as the company's...
Return on Capital Grows in Popularity in LTI Plans
We came across a recent report that we thought would be interesting to our readers. With the debate growing on whether or not TSR measures are the best approach for performance-based long-term incentives, this study highlights and discusses some other metric alternatives and...
The Role of Executive Pay in Promoting Responsible Business
While pay isn’t the only way to attract, retain, and motivate employees, the demand for transparency from shareholders and increased regulations have put executive pay under more scrutiny than ever before. This article reinforces that properly designed pay packages are...
Four Houston Oil Companies Lifted CEO Pay in 2016
NFP Compensation Consulting' President, Chris Crawford, was quoted in the Houston Chronicle's recent article entitled, Four Houston Oil Companies Lifed CEO Pay in 2016. He states, "2017 Proxy statements are being filed, disclosing executive compensation for the last year. Trends...
4 Guiding Perspectives on Compensation Committee Goal Setting
"Compensation committees face a full agenda in the first quarter of every new year. We outline four guiding perspectives or data points that all committees should consider as they set compensation goals. Now in the thick of Q1, compensation committees tend to find themselves...
NFPCC’s Thoughts on “Excessive CEO Pay for Dumb Luck”
Interesting article. However, a few additional points to complete the compensation picture. One, there is no reference to actual pay received as tied to stock price performance. Rather, this is a reference to the summary compensation table. Added, the summary compensation table...
Interesting Article Gives Insight Into How Boards Should Self-Evaluate Performance
The following excerpt was taken from a Harvard Business Review article in March of 2017. How do you think boards should evaluate themselves? "The New York Stock Exchange requires that the boards of all publicly traded corporations conduct a self-evaluation at least annually to...
Six Tips to Helps Boards Avoid a Crisis
"When an organization fails because of executive malfeasance, it generates a lot of attention. But such situations are actually relatively rare. It’s much more common, though less talked about, for organizations to fail because of ungoverned incompetence. That is, someone does...
Companies Are Increasingly Using Non-Financial Goals For Executive Compensation
"Executive compensation has always been a difficult topic and as executive wages have grown rapidly since the financial crisis, while the wages of the average worker have stagnated, the debate around executive compensation has only become fiercer. Companies have responded to the...
Sustainability: Hot Nonprofit Governance Issues
"In the next four years, nonprofit boards will face exceptional challenges affecting long-term financial and operational sustainability. It is likely that governmental grants will substantially decline. Business/individual donor gifts can be reduced should the economy teeter...
Proxy Statements Increase Disclosures
"Nearly half of S&P 100 companies included information in their proxy statements that showed how they responded to shareholder concerns and made changes to policies, according to a new report from Equilar, Innovations in Proxy Design, featuring commentary from Donnelley...
Rewarding Executives for Successful Bank M&A
"Mergers and acquisitions (M&A) can create significant value for shareholders. Accordingly, bank executives should be rewarded when completing and integrating successful transactions. However, in today’s environment of heightened executive pay scrutiny, some approaches to...
Trump to Order Dodd-Frank Review, Halt Obama Fiduciary Rule
"Donald Trump will order a sweeping review of the Dodd-Frank Act rules enacted in response to the 2008 financial crisis, a White House official said, signing an executive action Friday designed to significantly scale back the regulatory system put in place in 2010. Trump also...
OUR THOUGHTS ON ADVICE FROM BNA: IRS UPDATES GOLDEN PARACHUTE PAYMENT AUDIT TIPS
Our consultants took a keen interest when the IRS updated its golden parachute payment qualification requirements. Our 280g calculation & qualification experts continue their advisory role for businesses including audit support for CPAs. Check out these IRS audit tips from BNA...
Reconsideration of Pay Ratio Rule Implementation
"The Commission adopted the pay ratio disclosure rule in August 2015 to implement Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The rule requires a public company to disclose the ratio of the median of the annual total compensation of all...
Paul Gryglewicz Article Discusses Say on Pay & the Need for Better Shareholder Engagement
Paul Gryglewicz, a senior advisor at Global Governance Advisors, shares his thoughts and advice on how to increase shareholder engagement in preparation for Say on Pay votes. "2017 marks a milestone year in terms of Say on Pay in the United States, as the first six-year 'say...
Board of Directors Pay: Rewarding for Expertise
"Board of Directors pay continues its upward trend according to a study published by Total Compensation Solutions (TCS). The Board compensation report shows increases of approximately 7 to 8 percent from last year for annual retainers for the Chairman, and Regular Board Members...
Incentive Plan Payouts Prove Effective Pay for Performance
Companies, shareholders and boards of directors want to ensure alignment of pay and performance to justify the often-high accompanying price tag of executive compensation. To provide context on the correlations between awarded, realizable and actual pay earned under...
Are Top Investors Listening to Proxy Advisors on Pay?
An interesting topic to discuss from an article on Value Walk, highlighting the distance between ISS and say on pay recommendations under certain conditions. Although there is a high percentage of correlation between investor voting and ISS, the percentage declines dramatically...
Executive Compensation: Analysis of Recent Incentive Financial Goals
"In order to understand the financial performance measures, target goals, performance ranges, and payouts of an annual incentive plan, we analyzed the proxy-disclosed practices of approximately 100 manufacturing and materials companies. We assessed year-over-year (YOY) trends in...
Is Your Bank Ready for the CEO Pay Ratio Disclosure?
"Starting with the 2018 proxy statement (covering fiscal year 2017), most public companies will be required to start reporting their CEO pay ratio, that is, the ratio of the CEO’s pay to the median of all other employees’ pay. While it is questionable whether the CEO pay...
2017 Agenda: Priorities for Boards, Audit Committees and Private Companies
"Political swings, global volatility, technology innovations and investor expectations will require deeper board engagement. Drawing on interactions with corporate directors and business leaders as well as insights from its research, the KPMG Board Leadership Center has...
Golden Leash Rule, Say-on-Pay, Form 10-K Summaries: Proxy Season Guide to 2017
Check out this interesting read regarding the new say on pay rules, form 10-k summaries, and a guide for proxy season. "As another year comes to a close, it is time for public companies to become acquainted with the securities law and business developments of the past year...
2017 Board of Directors Predictions: 5 Trends to Watch
"2016 was a year marked by significant changes—stunning political upheavals via Brexit and our own controversial new President-elect; a growing number of big-ticket, multi billion dollar M&A deals amid massive enterprise court battles, particularly in the technology...
Benefit Issues for 2017
Wilkins Finston Friedman Law Group “wrapped up” the year 2016 with their predictions of the benefit issues employers will face in 2017. Here are their top four benefit issues for 2017: •Health Care Reform. Speculation is rampant as to the extent of the upcoming changes...
Board Director Pay Keeps Pace, BDO Analysis Finds
"Board director compensation levels for middle market companies kept pace with the economy between 2014 and 2015, according to a new report from BDO USA, LLP, a leading accounting and consulting organization. Following years of solid increases, compensation remained relatively...
Short-Term Incentive Pay Criteria Are Shifting
"The criteria for earning short-term incentive (STI) compensation appear to have entered a state of flux, judging by new research from the CFO Alliance. In particular, some companies are putting non-financial metrics, like customer or employee satisfaction, into the mix. But far...
ISS U.S. Frequently Asked Questions are Published
ISS has published the U.S. Frequently Asked Questions for Equity Plan Compensation, Executive Compensation, Pay-for-Performance Mechanics, and U.S. Peer Selection (available here). In addition, an updated PFP white paper to reflect the new financial performance alignment test...
More Guidance on Section 409A
"Last month, the IRS provided helpful guidance under Code Section 409A with the release of its Chief Counsel Advice 201645012 (the CCA). The CCA is noteworthy because the IRS agreed that a 25% increase qualified as a materially greater amount, and thus deferred salary was...
The Future of Compensation & Corporate Governance Amid a Trump Presidency
One thing is for certain, the results of the election created a myriad of questions regarding the future of American politics. Less certain, though, is the level of impact the results will have on the futures of various executive compensation and corporate governance policies...
High Time to Sharpen Executive Pay Clawbacks
"Whether you’re looking at a mutual fund or company stock, you want to see the management team having a significant amount of their own 'skin in the game' through a large commitment of personal financial resources. While this doesn’t guarantee success, at least you know the...