Compensation Strategy & Plan Review Consultants
Ineffective and outdated compensation plans can cripple a company’s ability to attract and keep top talent. Our compensation consultants can conduct an independent compensation plan review that highlights opportunities and realigns your compensation strategy to fit the current market of your industry. Our expertise lies in executive compensation, but we can assist with strategy and planning across all employee levels.
A compensation strategy is a plan outlining how pay and benefits decisions will be made and should align with your organization’s overall goals, business strategy and culture. Additionally, the compensation strategy defines your company’s position in the external market while ensuring alignment with internal objectives and HR initiatives.
Why Every Business Should Have a Compensation Strategy
Attract, motivate, and retain talent. The need to have an effective compensation strategy can be summed up in this one phrase. A carefully crafted compensation strategy gives organizations the ability to attract, motivate and retain skilled talent that will ultimately lead to maximized business performance. Offering a competitive compensation package within your market aids recruiting and retention efforts while increasing loyalty and productivity in current employees. Employees are more motivated to work for a company with a well-thought-out strategy that is clearly communicated. Moreover, having an incentive compensation strategy in place to reward top performers further encourages workers to deliver better results.
In addition, a compensation strategy helps the organization manage its operational budget and largest expense – executive and employee pay. It also helps establish and maintain pay equity and compliance with other compensation related regulations.
Executive Compensation Strategy
The challenges involved in strategizing, updating and managing an executive compensation plan face increasing scrutiny from shareholders, regulators, proxy advisors, shareholder activists, and activist law firms. With a push for higher transparency and more connection to pay and performance, competing points of view result in a struggle to find the best way to balance the fairness and appeal of an executive compensation plan.
At NFP Compensation Consulting , we believe that ROI should be the driving factor in annual incentive plan design. The plan’s financing should be based on the achievement of quantitative objectives that update as the business grows. Non-monetary ROI like employee attitude and customer satisfaction also indicate a plan’s success.
NFP Compensation Consulting will help strategize & review your organization’s current compensation plan and design a personalized plan tailored to your exact needs.
What Does an Executive Compensation Plan & Strategy Entail?
An executive compensation plan review helps your organization to discover the gap between the state of your current plan and where it should be.
The compensation plan review process entails:
- Evaluating the current plan details
- Assessing industry-specific trends and needs
- Conducting a market and peer group analysis
- Determining KPIs and goals
- Creating a tailored plan
- Obtaining stakeholder signoff
- Communicating these changes
Benefits of Partnering with a Compensation Consultant
- Expertise. A compensation consultant can provide expert advice, best practices and guidance to navigate the challenges that come with compensation planning.
- Good Governance. With increasing pressures on executive compensation by the IRS and shareholders, an independent consultant can provide real value to the process and governance of executive compensation.
- Litigation Prevention. Expert advisors understand where compensation landmines exist and can help mitigate litigation. Studies have linked many controversial pay practices, such as option backdating, to the absence of independent consultants and absence of independent directors of the board.
- Navigation through Difficult Issues. With tension over executive compensation growing in organizations, a consultant can provide an independent voice of reason to the board and management to navigate those difficult discussions.
- Customization. Every organization is different and has unique circumstances. A good advisor will listen and assess your needs to customize a plan that fits you.
- Time, Availability & Resources. A team specifically dedicated to compensation planning has the time, specialized expertise, and access to resources such as survey data, to complete the task within your timeline.
How NFP Compensation Consulting Can Help with Your Compensation Strategy
As a thought leader on compensation, our firm is uniquely positioned to help your organization navigate the ever-evolving landscape of compensation plans.
Our services include:
- Strategize, design or recommend the restructuring of incentive programs to maximize employee motivation and promote achievement of company goals and objectives.
- Plan features and recommendations with formula vs. discretionary targets, thresholds, maximums, payout timing, vehicles, plan metrics, etc.
- Drafting of communication documents.