Are your shareholders happy with the way that you pay your top team?
Retaining and attracting senior management capable of driving your company’s success is a never ending problem. A disciplined process helps balance the competing interests.
Effective compensation addresses multiple facets representing different stakeholders’ interests:
- Internal Equity – A fair and transparent, process for salary progression within the hierarchy will be important to your team. They need to feel fairly paid
- External Market – It’s expensive to replace great executives; so making sure that you offer the same financial advantages as your competition is critical
- Governance – Following best practice and legislation helps attract new investors
The External Market
Benchmark your pay levels against a group of similar sized and similarly complex competitors. Harvest data from publicly available sources or a survey that includes similar businesses. Choose an independent expert to help apply and adapt the data to the specific needs of your organization. The Human Well accesses multiple sources from around the world on behalf of its clients.
It’s important to articulate and document compensation philosophy and policy. Consider how base salary, annual cash and longer term incentives support your corporate objectives. Written policies remind both management and compensation committee of your pay objectives.
A Program that Fits the needs of your Organization
Within this framework develop an approach that distinguishes you from your competition for talent and financial resources. The plan should be easy to communicate and above all, motivates and provides an incentive for the team to excel.
We suggest 5 Ways To Create Your individual Compensation Advantage. For further information and insights contact The Human Well.