Posts Tagged ‘Long Term Incentives’

Maximizing the Utility of Executive Retirement Plans

by  

No Comments | Share/Save

In his article, “A New Look at Executive Retirement Plans,” Phil Currie of Fulcrum Partners explains why current downtrends may be compelling organizations and compensation committees to revisit a venerable standby in the benefit plan lineup: DC SERPs: the hardest-working component in a retirement plan line up.


Continue reading “Maximizing the Utility of Executive Retirement Plans” »

Filed under: PSX Articles



Don’t be Fooled

by  

2 Comments | Share/Save

Expert Perspective by Grahall’s OmniMedia Editorial Board

expert perspective telescopeRick Newman’s September 23rd article “Outlandish CEO Pay: How to Fix the Problem” published in Seeking Alpha summarizes, simplistically, the problem of excess CEO pay and the possible solutions to this problem, recounting the problems faced by Merrill Lynch, Citigroup and AIG following poor leadership by Stan O’Neal, Charles Prince and Martin Sullivan, respectively.  Newman’s point being these Wall Street icons made millions (and millions) while the companies they led lost billions.

Although overly simplified, we don’t disagree with most of what Newman says –  in particular, linking pay to long term performance and establishing claw backs as standard protocols in executive contracts. Grahall’s approach to structuring executive compensation packages is to link pay to events. In many companies there is a mismatch between these elements. 
Continue reading “Don’t be Fooled” »

Filed under: Expert Perspective



It’s Complicated

by  

5 Comments | Share/Save

expert perspective telescopeExpert Perspective from Grahall’s OmniMedia Editorial Board

An article by V. G. Naraynan published in Harvard Business Review on Monday June 22, titled ‘Executive Pay: It’s About “How,” Not “How Much“’  got our editorial board talking. 

The “how” vs “how much” question certainly begins to touch on the core issues at hand. However, these issues are more complex and multifaceted than the article suggests, and unfortunately, as is often the case, the media has little inclination to report the details. 
Continue reading “It’s Complicated” »

Filed under: Expert Perspective



Equity Compensation for Long-Term Results

by  

No Comments | Share/Save

Published in The Wall Street Journal June 16, 2009 by Lucian Bebchuk and Jesse Fried

Treasury Secretary Timothy Geithner announced on Wednesday the Obama administration’s strong belief in tying executive compensation to long-term company performance. The regulations issued that day direct the new “compensation czar” to ensure that financial firms receiving “exceptional assistance” from the government don’t “reward employees for short-term or temporary increase in value.” Companies not covered by regulations are also currently seeking to tighten the link between pay and long-term performance. The question is how this could best be done.

Link to full article.

Filed under: Newsfeeds



The Real Problem With Long Term Incentives

by  

No Comments | Share/Save

Expert Perspective by Grahall’s Michael Dennis Graham

What is missing in the December 7, 2008 opinion piece in Financial Week authored by Gregg D. Polsky, professor of law at the Florida State University College of Law is an understanding of time.  Stock options for most organizations’ executives fully vest over 3, 4, or 5 years. In fact almost all of the long-term incentives are stock option based and vest ratably over these periods. So a stock option that vests ratably over 3 years is therefore 1/3 vested after 1 year, and 2/3’s vested after 2 years, and so on.


Continue reading “The Real Problem With Long Term Incentives” »

Filed under: Expert Perspective



Opinion: The problem with performance-based compensation

by  

2 Comments | Share/Save

Published in Financial Week December 7, 2008 by Gregg D. Polsky

A major cause of the current economic crisis was the simple failure of financial institutions to adequately price risk. Former Federal Reserve chairman Alan Greenspan recently testified that he was “in a state of shocked disbelief” that the “self-interest of lending institutions” failed so markedly to protect shareholders. One question is whether a provision of the tax code that encourages companies to use significant amounts of performance-based compensation may have contributed to the current dire situation.

Link to full article

Filed under: Newsfeeds