I've been working on an announcement of a new executive incentive program over the last few weeks. Things are going great, actually, with minor edits to first drafts. What fun!
Nevertheless, I have just re-realized something that occurs to me each time I work on executive compensation.
So, for you, a word to the wise . . .
The first step on your project plan? I recommend making it the job of working out the examples that you'll present to the execs.
Yes, the elements of exec incentive communication are pretty standardized -- plan documents, plan summaries, Qs and As, executive presentation, statements. But each and every plan is a finely drawn example of many hours of strategizing and planning. Strategizing about what will motivate executive behavior, the right (and fairest) financial measures to hang an incentive on, how to deliver a competitive compensation opportunity, how to retain your key people, and so on.
For the executive, these messages light up in the examples you communicate. Plus, if you notice, examples are where their "ah ha's" can be heard. The rest of the info is needed, for sure, but executives feel little motivational energy until the examples go up on the screen.
So start your project plan by setting time aside to develop examples. Figure out how to tell your story. Are you going to show a time-based example of a vesting target grant? Or, would a single year's compilation of vested awards be more telling? What's the best stock growth assumption? (That always involves a lot of discussion.) Is it fair to indicate there will be an award each year, and so on.
The process of developing examples illuminates so many issues that are important to executives, prepares you to manage expectations and equips you to do an even better job on all of the other communications. Plus, the process also helps specify all of the business conditions and financial factors that executives should be tracking (and that the design team discussed for so long).
So do the numbers first. Turn that vague financial exercise called a plan design into someone's actual career (salary, performance rating, length of service and all) before getting all of the rest of it -- like tranches and vesting periods and other such profoundly inspirational messages -- down on paper.
Margaret O'Hanlon is founder and principal of re:Think Consulting. She has decades of experience teaming up with clients to ensure great Human Resource ideas deliver valuable business results. Margaret brings deep expertise in total rewards communication to the dialog at the Café; before founding re:Think Consulting, she was a Principal in Total Rewards Communications with Towers Perrin. Margaret earned her M.S. and Ed.S. in Instructional Technology at Indiana University. Creative writing is one of her outside passions, along with Masters Swimming.
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