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12/26/2013

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Dan, virtually all of this will be driven by whatever the legal/regulatory regime is at the time. My own view is that the current environment discourages any company from going or remaining public, with all that that entails.

The current indications suggest that Republicans will hold the House in 2014. Whether they gain control of the Senate is irrelevant. Obama will still be in the White House. We will have gridlock and the status quo for the next three years.

Five years from now, if we have (e.g.) President Elizabeth Warren and a Democrat controlled Congress, it is not difficult to envision either direct (e.g. maximum allowable ratio to lowest-paid employee) or indirect (higher marginal tax rates, excise taxes on bonuses, etc.) constraints on management and executive compensation. Consequently, the legal and financial engineering expertise required to achieve compliance and tax effectiveness will be at a premium.

Conversely, if we have (e.g.) President Rand Paul and a Republican controlled Congress, it's reasonable to suppose that there might be some hiatus or rollback of constraints on reward program design. So, (e.g.) there might be an opportunity to introduce comp time for private sector employees. Expertise around conjoint analysis might be a particularly worthwhile skill.

10 years from now, Millenials will make up a much larger proportion of the workforce than they do currently. Based on the research I've seen about them, I imagine we will see a much greater emphasis on group-based vs. individual incentives.

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