We partner with Compensation Committees to help guide their approach to setting pay. This includes defining compensation philosophies, developing peer groups, conducting competitive assessments and managing risk— all in the name of ensuring your pay programs align with your business goals.
Executive Compensation Strategy
"Our Board needs a partner who can manage executive rewards from every angle."
We work with Boards of Directors and senior business leaders to design executive compensation programs that are fundamentally sound, flexible, responsive and competitive in today's aggressive market for top leadership talent. We begin by understanding your company's near- and long-term business priorities, and then partner with your people to:
- Define Your Compensation Philosophy and Strategy – Your compensation philosophy serves as a touchstone for all compensation and governance-related decisions. While some view compensation philosophies as a check-the-box exercise, in reality, they can serve as a critical differentiator in an ultra-competitive talent market by fostering strong internal alignment and keeping your business focused on its areas of strength.
- Identify Peer Group Companies – We'll help you establish a best-fit peer group reflecting your company's current financial and strategic profile, as well as corporate governance best practices. In particular, we have deep expertise building peer groups for technology and life sciences companies at various stages of development, where often over-looked financial metrics can be critically important.
- Assess the Competitiveness of Your Compensation Program – We work with our clients to assess the overall competitiveness of their executive rewards programs, at both a team and individual level. Leveraging a wealth of market insights only available through Radford, we'll examine the base salaries, bonus targets, bonus payouts, equity awards and equity holdings of your executives to ensure you're in-step with market trends.
- Ensure Effective Links between Pay and Performance – At the end of the day, establishing an appropriate link between pay and performance is what matters most to your people and shareholders. We'll assess the effectiveness of your short- and long-term incentive plans to make sure these programs focus, motivate and reward executives for the achievement of critical, strategic, operational and financial objectives, which ultimately result in strong stock price performance for shareholders.
- Conduct Retention Analyses – Measure the long-term holding power of equity awards to ensure your executive team will be in place for your next business milestone.
"We want a differentiated approach to equity that drives great performance."
Equity compensation sets the technology and life sciences sectors apart, and in many cases, it's the most powerful differentiating factor in executive compensation. From benchmarking award sizes to designing advanced performance-based equity programs, we help our clients maximize both the motivational and holding power of equity awards, while limiting dilution and burn rates. Our work typically includes:
- Long-Term Incentive Plan Design – Our consultants work with clients to identify the right vehicle mix, grant sizes and target ownership levels for your entire executive team, and where appropriate, we assist in the implementation of performance-based equity plans. This includes the selection of performance metrics, performance targets, pay-for-performance modeling and the certification of payouts.
- Equity Compensation Reviews – We'll evaluate your current equity compensation program relative to the market to ensure you're making the most of your equity resources when attracting and retaining key executive talent. This work includes examining award vehicle types, vesting schedules, new-hire practices and severance provisions.
- Monitoring Burn Rates and Shareholder Dilution – Maximize your return on equity awards while optimizing burn rates, shareholder dilution and equity compensation expenses to ensure shareholders and proxy advisors don't view your equity programs as excessive.
- Share Request Modeling – All forms of stock-based compensation are under an increasingly powerful microscope, making it as challenging as ever to achieve share request success. Our experts partner with clients to help them navigate the maze of proxy advisor policies and investor guidelines that influence plan design.
Board of Director Compensation
"We want to make smart, reasonable director compensation decisions."
Director compensation seems like it should be a straight-forward exercise. However, as time commitments increase, committee work gets more complex, and the prospect of litigation aimed at director equity awards climbs, finding the right balance between attracting quality directors and avoiding shareholder ire is as challenging as ever. We partner with boards to handle all of their compensation needs, including:
- Aligning with Market Pay Levels – We'll analyze peer group practices to help you determine appropriate levels of pay for your Board of Directors, including total compensation, cash vs. equity pay mix, annual retainers, committee fees, meeting fees, annual and new-member equity awards, and additional fees for key leadership positions.
- Adopt Great Pay Practices – How you deliver compensation is often just as important as how you pay people. From vesting schedules to award vehicles to committee retainers vs. committee meeting fees, we'll help you deliver director compensation in a manner consistent with your business needs and shareholder expectations.
From Sarbanes-Oxley to option expensing to Dodd-Frank, every public issuer faces a mountain of government and proxy advisor regulations aimed at executive compensation, director compensation, equity compensation, corporate governance and director independence. There are literally hundreds of rules and best practices for every Compensation Committee to consider. However, managing corporate governance, and more importantly, your relationships with shareholders, goes far beyond a check-the box exercise. To learn more about our full suite of corporate governance services, please click here.