Determining executive compensation and directors’ salaries in context of Market Benchmarked Board Compensation Design can present major challenges for for-profit and not-for-profit organizations. This is especially acute in the area of governance and disclosure practices. The disclosure requirements, most recently items such as gender based disclosure in Ontario pose significant reputational challenges that can result in greater scrutiny of governance policies of boards.
Arcus’s research indicates that boards are looking for a clearly defined mission and vision that can translate into realistic goals in context of executive compensation and director pay. It is a fiduciary requirement for boards to develop compensation strategies that are in line with market benchmarks and meet the following requirements:
Executive compensation governance
- This should be based on clearly defined and documented performance metrics
- The compensation must be competitive; market based and should be clearly linked to desired outcomes that are in the best interests of the organization.
Director compensation governance
- A clearly defined director compensation policy that may include pay formats such as an annular or quarterly retainer.
- The disclosure requirements fro director compensation have increased significantly in recent years and requires a performance based component.
Director Compensation and Say on Pay
Increasingly, share holders expect to have a say on pay for executive compensation and director retainers. This requires clearly defined disclosure policies that provide detailed information and follow good governance processes. Disclosure policies must clarify the roles and responsibilities with regard to determination of board compensation. It is also important to have board compensation procedures independently verified and compliant with company’s financial reporting requirements that must include board compensation reports. The requirements include timely disclosure of material matters along with transparency to investors who expect factual information.
Please click on the links below for additional information or contact us to schedule a call / meeting or us to discuss how we could leverage our tools to meet your requirements.
Job Evaluation and Impact Measurement
Organization Wide Compensation and Rewards
- Incentive planning
- Compensation and Job Evaluation outsourcing
- Annual incentives / variable compensation
Arcus offers services in all the key areas that impact executive and organization compensation:
Board advisory
Compensation Design
Incentive planning
- Incentive plan development
- Compensation disclosure planning
- Market Benchmarked Board Compensation Design
- Expert Witness Consulting Services
Please click on the links below for additional information or contact us to schedule a call / meeting or us to discuss how we could leverage our tools to meet your requirements.
Related information
- Appreciative Inquiry leverages a “positive change core”
- Top Steps to Successful Change Management
- Change Management Programs
- Change Management Insights
- Arcus Change Management Model (ACM)