The Advisors' Blog

Yesterday, I shared some compensation practices consistently utilized by enduring high-performing companies per WTW. The WTW article is quick to say that these practices might not fit your organization. That said, they recommend companies at least ask some questions and consider some lessons from the approaches taken by these companies. Here’s one of their suggestions:

Challenge yourself with questions such as:

– Could we reduce our number of performance metrics across both STI and LTI to optimize focus on what truly matters to strategy execution and value creation?
– Should we revisit our performance ranges and recalibrate our payout opportunities?
– Is our LTI vesting cycle sufficiently long?
– Could stock options (or another form of share-appreciation LTI) make sense as we expect renewed growth?

The answer to each could be “no” or “not now,” but asking these questions can be beneficial toward ensuring the pay program evolves in step with your organization’s strategy and performance journey.

– Meredith Ervine