north america Articles

2015 Say-on-Pay Review for the Technology Sector

In this report, Radford examines five years of say-on-pay voting results for the technology sector compared to the broad Russell 3000. We also review the influence of proxy advisors, industry performance and top governance concerns.

2015 Say-on-Pay Review for the Life Sciences Sector

In this report, Radford examines five years of say-on-pay voting results for the life sciences sector compared to the broad Russell 3000. We also review the influence of proxy advisors, industry performance and top governance concerns.

Radford Methodologies: How to Value and Apply Equity Compensation Market Data

Designing effective equity programs is one of the most important roles for human resources and compensation professionals. But before companies can design an effective equity program they need to gather market data and have a common methodology for valuing that data.

Is Your Employee Equity Plan IPO-Ready?

In preparation for an upcoming IPO, one of the most important considerations for compensation and HR professionals is evaluation their employee equity incentive plan— which is strikingly different for public vs. private companies. In this article, we outline the top five areas of equity plans for employers to consider as they prepare for a public offering.

Risky Business: What to Expect as Treasury Rates Rise

Historically low interest rates won't last forever. Compensation professionals that understand the effects that the inevitable increase in risk-free rates will have on equity compensation valuations will be ahead of the game.

In a Competitive Market, Biotech Firms Proving Effective in Retaining Employees

Biotech companies have higher salary increases compared to the general life sciences sector and have increased their target cash positioning. This has allowed companies to keep voluntary turnover at bay and attract new talent to fuel their rapid growth. Our article examines the latest data for the red hot biotech industry.

Hot Topics Excerpt: Technology Firms Aim Higher for Engineers than Executives

How fierce is the competition for technical talent? Well, our latest research shows that technology companies now set the bar higher for engineers than executives, targeting pay levels above the market 50th percentile for technical roles more often than for executive officers. Read our latest report to learn more.

The SEC Proposes Pay-versus-Performance Disclosure Rules. Now What?

The SEC has issued a long-awaited rules proposal on how companies should disclose the alignment between executive pay realized in a given year relative to total shareholder return. We expect the proposed rules to have special implications for our clients in the technology and life sciences sectors.

When is it Time to Get Worried about High Sales Force Turnover?

Our recent article on sales force turnover at software companies turned a few heads and prompted a number of interesting questions from readers. With those inquiries in mind, we decided to dig deeper and explore the potential impact of sales rep turnover on revenue goals, as well as turnover rates across key US regions.

As the Race for Top Talent Intensifies, US Tech Firms Ratchet Up New-Hire Equity Awards

As corporate valuations climb, so too does the value of unvested equity awards. This makes it harder to recruit talent and drives demand for larger and larger new-hire equity grants. In our latest article, we unearth a little known pay metric to highlight the dramatic uplift in new-hire equity award sizes over the past five years.

Software Sales Professionals are on the Move as the Technology Sector Booms

Voluntary turnover among sales professionals at technology firms is rising, with the highest rates at software companies. A number of factors are contributing to the increase: an improving job market, demand for cloud-based selling experience, and a growing field of innovative products. HR managers shouldn't feel defenseless, though. Find out what you can do to stem the turnover tide.

Accelerating Sales without Breaking the Bank

Most companies have sales commission accelerators in place. However, few are well-equipped to know if their accelerators are optimized to meet business needs. In this article, we explain how a data-driven approach can be used to design accelerator programs in-tune with both market trends and sales team performance.

Boards Face Pressure to Ban Accelerated Vesting, but Market Practices Tell a Different Story

The number of shareholder proposals calling for bans on the acceleration of equity after a change-in-control is on the rise. So, too, is shareholder support for these initiatives. Radford's recent survey of severance practices at technology and life sciences companies shows that equity acceleration is still the norm, but policies in this area are slowly evolving.

ISS Releases Details of Scoring System Under New Equity Plan Scorecard Approach

This year, ISS is adding a number of factors to how it evaluates equity pay plan proposals beyond the cost of plan administration. Technology and life sciences companies, which often rely more heavily on equity for their overall pay mix at all levels of the organization, should be aware of how ISS's new scorecard approach could impact a favorable proxy vote.

Getting Severance Right: An Overview of Current Policies and Practices at US Technology Companies

Radford's 2014 Severance & Change-in-Control Practices Survey provides detailed information on how technology companies treat involuntary termination and change-in-control (CIC) scenarios on an organization-wide basis. At their core, severance programs did not change dramatically since our 2011 survey; however, we still observed several meaningful trends worth noting.

Getting Severance Right: An Overview of Current Policies and Practices at US Life Sciences Companies

Radford's 2014 Severance & Change-in-Control Practices Survey provides detailed information on how technology companies treat involuntary termination and change-in-control (CIC) scenarios on an organization-wide basis. At their core, severance programs did not change dramatically since our 2011 survey; however, we still observed several meaningful trends worth noting.

Like "Check Engine" Light, Use Compensation Cost of Sales to Look for Trouble

In the January 2015 issue of WorldatWork's Sales Compensation Focus newsletter, Radford's Scott Barton discusses how key business metrics can be used to determine if your sales incentive plans are properly designed and functioning at maximum efficiency. Measuring the rate of change in sales costs vs. revenue growth is a simple step that can open up a world of insight.

SEC and FASB Disclosure Requirements for Holding Periods and Illiquidity Discounts

The adoption of mandatory post-vest holding requirements is on the rise, yet disclosures relating to illiquidity discounts associated with this governance practice are often lacking. Companies that fail to appropriately address the methods and assumptions used to quantify discounts could soon face more scrutiny.

Mandatory Post-Vest Holding Requirements: A New Approach for Mitigating Your Company’s Equity Compensation Expense

Companies often adopt mandatory post-vest holding requirements to achieve governance benefits, including the creation of a pathway for executives to meet ownership guidelines. However, holding periods, when designed to meet accounting standards, have significant potential to deliver valuation savings.

The Many Governance Benefits of Mandatory Post-Vest Holding Requirements

Although ownership guidelines and holding periods are increasingly common, few companies understand and take advantage of the full breadth of governance benefits associated with holding requirements. From building an ownership culture to enforcing clawbacks, there's more than meets the eye.

Maximize Your Investment in Equity Compensation and be a Good Corporate Citizen at the Same Time

Mandatory post-vest holding requirements are a rare find; they allow companies to maximize their investment in equity compensation while being a good corporate citizen at the same time. From numerous governance benefits to reduced accounting costs, holding periods are worth the investment.

Time is Money: Exploring the Costs of Hiring a CFO in Preparation for an Initial Public Offering

For private technology and life sciences companies on the path to an IPO, does it matter when you hire a CFO? When it comes to their pay, the surprising answer is that it all depends on how you look at it. Read our latest article to find out why.

Linking a Broad-Based Equity Strategy to Higher Returns at US Biopharmaceutical Companies

While companies face intense outside pressure to reduce the costs of administering broad-based equity plans, new research from Radford indicates that high-performing biopharmaceutical companies are actually aggressive users of equity, both in terms of grant values and participation rates.

Restricted Stock Units (RSUs) Are Everywhere, But Are They Right For You?

For more than 10 years, the pendulum of equity compensation strategy has swung firmly in the direction of RSUs and away from stock options. Now it's time to ask a few hard questions: Is this shift in strategy working, and who wins and loses?

Disclosure Requirements for Relative TSR Plans: SEC Requirements for Form 10-K and Form 4 Filings

As the popularity of performance-based equity awards with relative TSR metrics surges, regulators, shareholders and proxy advisors are sure to pay closer and closer attention to plan disclosures. This article examines key disclosure requirements.

Taking Control of Your Company's Executive Compensation Narrative

It might be hard to fathom in a world so often dominated by complex legalese, but taking a proactive, marketing-minded approach to communicating your executive compensation program is increasingly the safest way to travel in a rocky compensation governance landscape.

Avoiding Relative TSR Plan Design Oversights

Performance-based equity awards with relative TSR metrics have a simple mission: to align managing-pay and performance. However, that doesn't mean the plans themselves are simple. This articles explores common design oversights and creative fixes.

Is Your Equity Plan Ready to Go Public?

In the months leading up to an initial public offering (IPO), technology and life sciences companies often undertake a radical reimagining of their equity compensation programs. This process usually includes the adoption of new equity incentive and employee stock purchase plans.

Setting an Intelligent Sales Pay Mix Strategy

Setting an appropriate pay mix strategy for your sales compensation plan — the ratio of target total cash compensation that is attributed to base salary vs. target incentives — is a common pain point for growing companies aiming to maintain competitive sales compensation structures. This article explores common pitfalls and steps to take to address issues.

EITF Issue 13-D Explained

Seeking to address gray areas in the expensing of performance awards, the Financial Accounting Standard Board's ("FASB") Emerging Issues Task Force ("EITF") issued new guidance on March 13, 2014 covering situations where a performance target can be achieved after an employee provides the requisite service. The new ruling should simplify US GAAP expensing, but remains at odds with commentary from IFRS on the same topic.

 

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