Recently a lawyer mentioned to me that he had decided to utilize more basic executive plan designs, even when they might not be as good a fit for a specific client. When asked to explain he said that it was too hard to communicate complex plan designs when board members and shareholders demanded something they could understand quickly.
He said the ironic part was that shareholders then complained when executive pay was too high, or ineffective at retention, or paid out large amounts at severance. The disconnect between what was needed and what the shareholders understood was just too big.
Now, of course, this isn't the case at every company. But with there being so many issues and details to review during proxy season, a simple executive compensation plan is certainly attractive. And, simple approaches are often more than enough to accomplish the goals of many companies. Even when pay is simple, the misunderstanding between shareholders, boards and executives can persist. Perhaps its just a matter of perspective. I would love to know what you think about this issue.
What a great way to explain this! Wondering if you have shown this to any executives and what their comments have been!
Posted by: Jacque Vilet | 06/09/2014 at 10:21 AM
I have not shown it to any execs, but I expect that I will hear from some this week. I will post comments here as allowed.
Posted by: Dan Walter | 06/09/2014 at 11:59 AM
What executive comp plans are good for companies that are vegetarian? Too much meat at some could cause and arterial blockage.
Posted by: Sam Reeve | 06/09/2014 at 12:12 PM
This would be perfect if you added a third column for ISS and Glass Lewis
Posted by: Tony Bergmann-Porter | 06/09/2014 at 06:47 PM
Tony,
I wish I had more real estate! Adding in ISS/Glass Lewis, Politicians and the Media would have been fun!
Posted by: Dan Walter | 06/09/2014 at 08:30 PM