What’s a CEO To Do?

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expert perspective telescopeExpert Perspective by Grahall’s OmniMedia Editor 

In a recent article published in Bloomberg titled “Goldman Shareholders Suffered as Blankfein Earned $43 Million” journalist Ian Katz writes:  “…one way to defuse the pay issue is for financial CEOs themselves to institute reforms. One that has begun the process is Blankfein. At Goldman Sachs’s annual meeting, he laid out a set of compensation principles to shareholders.”  Katz further quotes Blankefein as saying: “No one in a risk-taking role should be compensated based only on his or her own profit-and-loss numbers, he said, adding that ‘contracts or evaluations should not be based on the percentage of revenues generated by a specific individual’.”

So for the CEO’s (financial or not) ready to take up the reins of executive compensation reform for themselves but who don’t know quite what to do first, here are some suggestions from Grahall:

 

Ø      Start by taking a good long, look at your company’s business and people strategies, and decide what kind of total rewards architecture will best fit the company. 

Ø      Investigate the competitive market attachment or “money” component of compensation.  Consider where you will anchor various components of pay (base pay, incentives, benefits, etc.)

Ø      Next consider the “mix” or balance among the different rewards components at various company and stock performance levels.  

Ø      Then outline the philosophy behind the rewards program and using messages make it clear to everyone what the reward plan is designed to accomplish.

 

Easy, right?  No, we agree it’s not easy at all. But when you get it right you will have an effective rewards strategy, uniquely fitted to your company, that links to your business strategy and provides a roadmap for the long-term success of your organization. Call us we can help you start down the right path.

 

Email Grahall’s OmniMedia Editor at edie.kingston@grahall.com      

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