October 14, 2015
More on “Trend? Comp Committees Setting Pay for More Junior Officers?”
– Broc Romanek, CompensationStandards.com
In response to my recent blog, Paul McConnell of Board Advisory weighed in with this:
Most of my Committees look past just the top 5 officers. In my opinion, the Committee should be looking at Compensation for the NEO’s, their organizational peers and any individuals that might be a near to mid-term succession candidate to this level. That is not to say that the Committee should be setting pay at this level, but the CEO should be discussing performance, potential and development needs for the group and then presenting their recommendations for pay actions (including any input from the individual’s direct boss) for the Committee’s approval/input.
One thing you want to avoid at this level is the Committee micromanaging the details so that execs learn they can lobby/befriend the Committee. I urge my clients to take an approach like Congress does with military base closings – approve it all or send it back to be reworked (e.g., use more options less RS, too much bonuses, etc.)