Let’s get the obvious out of the way. Yes, CEOs want to make sure they are paid well. Paid well when compared to peers. Paid well when compared to last year’s pay. Paid well when they do a great job. And, of course, still paid pretty well when they don’t do such a great job. But that’s not what this article is about.
As it turns out, CEOs want the same thing from their compensation leaders that they want from finance, technology, marketing, engineering and other leaders. The things they find important are strategy, customers, investors and culture. If your solutions aren’t centered on at least three of these four topics, they aren’t really solutions that address the CEO’s needs.
A Cheat Sheet from the CEO:
- Start with something I don’t know and summarize it to a level that allows me to either make a decision or ask critical questions. Have the details at the ready, but don’t insist that I see them.
- Give me solutions, not suggestions or problems. If it takes you a few extra days to turn your idea into a working prototype that proves its capabilities, please let me know in advance and we will meet in a few days.
- Please know our business and be able to speak to me in terms I use on a regular basis. I don’t want to learn your “language” of HR and compensation. Listen in on investor conference calls and read any memo you can get your hands on. Please learn my language of success.
- Don’t make assumptions about our business strategy. We explain it pretty darned well in our Proxy Statement. I secretly wish you had already read and understood our entire 10K and those of our most important peers.
- Explain EVERYTHING from the perspective of how it helps our business become more successful. It’s great if something is new, or trendy, or if you want to make employees happier, but all of that is useless if we aren’t growing and winning.
- PREPARE. There is a great quote from Woodrow Wilson that reads: “If I am to speak ten minutes, I need a week of preparation; if fifteen minutes, three days; if half and hour, two days; if an hour, I am ready now.” Which did you prepare for?
- Please try and tell me everything from my perspective, not yours. I know this can be tough but, trust me, it is probably harder for me to see the world through your eyes (unprepared) than vice versa.
Every CEO really wants each department in their company to be a profit center. How can Compensation, a department that is an open tap of money pouring out the door, be a profit center? Know the business strategy and have a story that explains how the compensation philosophy, structure, pay levels and communication programs will create more value than they cost. Be specific. Use timeframes that make sense. Make sure you have backing evidence or credible opinions from consultants, academic studies or colleagues at similar companies.
If you do your homework, you will be quick on your feet. That, my friends, is perhaps the most important aspect of working with a CEO. Most are in their position because they are bright, fairly impatient and have high expectations of themselves and anyone who wants to be called their business partner. Truly understanding your preferred solution and at least two or three alternatives provides you with the simple and important function of exceeding expectations. Exceed expectations and you will be invited back to the table again and again.
Dan Walter is the President and CEO of Performensation an independent compensation consultant focused on the needs of small and mid-sized public and private companies. Dan’s unique perspective and expertise includes equity compensation, executive compensation, performance-based pay and talent management issues. Dan is a co-author of “The Decision Makers Guide to Equity Compensation”, “If I’d Only Know That”, “GEOnomics 2011” and “Equity Alternatives.” Dan is on the board of the National Center for Employee Ownership, a partner in the ShareComp virtual conferences and the founder of Equity Compensation Experts, a free networking group. Dan is frequently requested as a dynamic and humorous speaker covering compensation and motivation topics. Connect with him on LinkedIn or follow him on Twitter at @Performensation and @SayOnPay.