The Advisors' Blog

– Liz Dunshee

We’ve been blogging quite a bit on TheCorporateCounsel.net about the Business Roundtable’s recent statement on corporate purpose – and the ensuing “stakeholder v. shareholder” debate. This “Directors & Boards” article from Semler Brossy suggests systematic ways for compensation committees to incorporate stakeholder values into executive pay decisions.

Of course, there are caveats! One being, the last thing shareholders want right now is murkier pay disclosure. But the article offers a few potentially tolerable ways to reflect “stakeholder goals” in annual incentives (for even more ideas, see this blog, also from Semler Brossy’s Seymour Burchman – and mark your calendars for our February 12th webcast – “Tying ‘ESG’ to Executive Pay“):

Individual goals:

• HR—establish new hiring protocols; training in using hiring protocols, customer service and sales training, training managers in coaching skills

• IT—develop customer analytic tools, develop inventory management tools

Store/region goals:

• Net promoter score/customer satisfaction score exceeding peers

• Average Sales dollars per full-time equivalent employee versus historical

• Gross margin exceeding peers

• Comparable trade area sales-growth (agnostic as to channel where purchase occurs)

• Employee turnover rate within 180 days of hire

Corporate goals:

• Total sales growth exceeding peers

• Profit growth exceeding peers

• ROI exceeding peers

• Corporate-wide net promoter score and customer satisfaction score exceeding peers

• Employee engagement scores exceeding historical