People Management Systems
Key Employee Pay Systems
Congratulations, as a small company if key employee pay is an issue - you are successful.
There is a veritable plethora of options to consider when compensating Key Employees. The assumption is, of course, that key executives have a disproportionate influence on corporate performance and have the leverage to direct their firm's strategic destiny. The basic question is determining the mix of short and long term executive compensation. The balance point for organizations' is different based upon a myriad of factors and will change from time to time.
The current trend is for more performance based plans and, since Sabanes-Oxley became law, less of a focus on stock options. Some of the Key Employee pay vehicles to consider are:
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Management by Objective and PBO plans |
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Annual Bonus and Golden parachute programs |
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Performance plans and unit plans for longer term incentives |
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Executive and bridge loans in non-publicly traded companies |
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Phantom stock or performance shares |
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Stock options and restricted stock options some with adjustable strike prices |
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Non-financial reward programs...performance based vacation allotments, sabbaticals, and a variety of other perks |
There is a lot to consider when designing a pay system to motivate and retain the company's key players. We've helped others tailor these basic practices to fit their company - we can develop the "right solution" for your business, as well.
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