March 11, 2015
Currency Fluctuations for Incentive Compensation
– Broc Romanek, CompensationStandards.com
Last month, I posted a “Quick Survey on Currency Fluctuations for Incentive Compensation” – for which I still seek more responses. Yonat Assayag of ClearBridge Compensation Group notes that I ask whether companies make adjustments to incentive goals/results based on the percent to which currency exchange rates fluctuate – and that this is certainly one way of dealing with the issue. Another way that he has seen it dealt with is by locking in an exchange rate when setting budget/goals at the beginning of the year, then at the end of the year, actual results are compared to budget/goals based on this “fixed” exchange rate (i.e., neutralizing the effect of exchange rate fluctuations). Yonat is curious how many companies take this approach – if you have any insight, please shoot me an email as many companies are grappling with this issue right now…
By the way, this topic was covered in yesterday’s webcast (audio archive is posted; transcript will be up in 10 days or so)…