by D. Kevin Berchelmann | Aug 28, 2007 | Brazen Leader, Human Resources, Kevin Berchelmann
So, I have had several emails asking about executive compensation in smaller companies. Apparently, some can see the detail in larger companies, but believe that the issues are fundamentally different in smaller and mid-market firms.
You probably don’t want to hear this, but base compensation is what it is, and should be close-to-comparable for a given accountability. Regardless, for the most part, of company size. Incentives and perquisites vary, of course, but again, base compensation simply is what it is.
Smaller private companies have long faced these issues regarding competition for executive talent, particularly w/ compensation. Fortunately, many public firms are beginning to curtail their biggest draw — equity options — since FAS 123Rnow requires that they expense them. So, don’t just throw up your hands.
Realize that the way to deal with executive compensation is via a well-thought plan, not simply a “base plus bonus” scheme. What do the investors/owners want from the company? Increased shareholder equity?? Relative stability?? Cash flow?? Net operating income?? Identify this first, since it will be your critical metric. Every plan starts with a purpose.
The key to keeping execs on target is a well-designed executive compensation plan.
On average, about 50% of a private CEO’s compensation is determined by how well his/her company performs within the chosen metric(s). The rest of the senior staff should still be north of 30%.
Consider, in addition to metric-based incentives:
** Modified gainsharing or goalsharing (for management)
** Deferred compensation (unfunded)
** Increased vacation/PTO
** Reimbursements for clubs, exercise facilities, etc.
** Conference attendance, with spouse allowance
There’s a ton more to do. Approach the effort holistically – you can’t get there with just a “base-bonus” philosophy.
Hope that helps some…
by Triangle Performance Staff | Aug 7, 2007 | Kevin Berchelmann, Organizational Effectiveness
Monster.com, the veritable cash-producing employment machine, is laying off about 15% of its workforce. Big deal, eh??
Actually, I believe there’s a teaching moment here…
That monster is laying off, in itself is little news; the part that drives me nuts:
1. Q2 sales increased 25%, almost $60M,
2. Share price is up almost 2%, and
3. Earnings are down almost 28%, caused by a 34% increase in operating costs, driven almost entirely by legal fees associated with their options-backdating investigation.
(more…)
by D. Kevin Berchelmann | Jul 10, 2007 | Executive Improvement, Kevin Berchelmann
In this and 2 remaining blog entries, I’m expanding on the “5 Irrefutable Laws of Leadership” I outlined in a recent article.
This third law is a reminder that development is essential for employee growth, and for your own well-being. In other words, it’s both selfish and generous; making someone else smarter while you do less work. This is a good thing, eh?
Law #3. If you always answer employee’s every question, you’ll forever be answering employees’ every question.
Questions are teaching moments — don’t rob employees of the opportunity. (more…)
by D. Kevin Berchelmann | Jul 8, 2007 | Executive Improvement, Kevin Berchelmann
Yup… a colleague of mine in corporate Human Resources told me he never, ever, goes to the EEOC’s proffered mediation sessions.
Says he has no reason to go; says he’s right, the claimant is wrong, and he can prove it. Therefore, in his mind, no reason to attend whatsoever.
What a loser…
Listen to me carefully: Go to each and every EEOC mediation offered by the EEOC, forever and ever, amen.
(more…)
by Triangle Performance Staff | Jul 5, 2007 | Kevin Berchelmann, Organizational Effectiveness
I received the following question from an HR Director in the midwest:
Contingency Fees: What’s the value? It seems that the fee percentage in permanent placement ranges from sometimes less than 20% to 30%+ of the candidate’s first years salary.
So, what’s the diff??
Where’s the value change between the 20% firms and the 30% firms?
Though I do not conduct contingency searches today, I spent many years in the Director/VP desk wondering much the same thing… (more…)
by D. Kevin Berchelmann | Jun 29, 2007 | Executive Improvement, Kevin Berchelmann
In this and 3 subsequent blog entries, I’m expanding on the “5 Irrefutable Laws of Leadership” I outlined in a recent article.
The second law focuses on open communications; too often, usually in the misplaced interest of correctness or conflict-avoidance, we tap-dance around topics, subjects, and even direction. We assume — often incorrectly — that someone “knows what we mean,” though we didn’t come out and say it.
Law #2. If you want something specific done, say so specifically, using clear, plain language. Employees, generally, have some difficulty doing their basic jobs; adding “mind-reading” to their description is just plain unfair.
No hints, implications, or innuendos. Say what you want, and use English! Directness counts. (more…)
