October 31, 2013

Robin A. Ferracone Profiled in ‘Workspan’ Feature on Executive Compensation Profession

Farient CEO Robin A. Ferracone was part of an esteemed panel of industry leaders interviewed for the “Workspan” magazine feature “The Legacy of Executive Compensation: The People, Events and Developments that Made the Profession What it­ is­ Today.” Robin’s portion of the interview is included below in full.

Other interviewees include Graef “Bud” Crystal, Wally Nichols, Bruce Ellig, Frederic W. Cook, Peter Chingos, Charlie Tharp, Ed Lawler, Ira Kay and Kevin Murphy. Click here to access the entire article from the Nov. 2013 issue on WorldatWork’s website.

“Every day I have to have respect for myself and my integrity and opinions,” said Robin Ferracone when asked how she handles the negative attention that executive pay often entails. “I always decide on true north and sometimes my opinions have been accepted and sometimes they haven’t.”

Ferracone, the CEO of Farient Advisors, has been a faculty member, author, reviewer, advisory committee member and friend of WorldatWork since the 1980s when she joined colleague, friend and mentor Gary Hourihan in starting a premier executive compensation consulting firm, Strategic Compensation Associates (SCA), which was a predecessor of her current firm.

In the early days of her career in consulting at Booz & Co., Ferracone and Hourihan developed a successful team focused on strategic implementation and human capital. As her career progressed, she wanted to “take strategy off the shelf… from a page in a binder to actions and implementation. Designing pay to align with business strategy helped to focus executives on what was important.”

She also enjoyed speaking with top executives at client firms she worked with. “I loved to talk about business strategy – where the company was going, not just where it had been – and you get that at the executive level,” Ferracone said.

Her passion for the executive compensation consulting profession led her to write the book “Fair Pay, Fair Play: Aligning Executive Performance and Pay” and to develop the firm’s database that helps clients determine whether pay and performance are aligned. In designing pay programs, she helps clients answer the questions: Does this pay system work the way it is supposed to? Does it support the strategy? Does it focus people on the right things? Is the amount of pay appropriate via the marketplace? And is that pay commensurate with the performance?

One of the aspects she enjoys most about executive compensation is the link between strategy and compensation. “If you think about it, compensation is strategic,” she said. “Incentives have the greatest impact at the executive level, and that’s where the strategic aspects of pay design are most pronounced.”

Ferracone believes that transparency and understanding will be key to the future of executive compensation.

“A sharp focus on pay and performance will be a big factor. It’s what investors look for and people focus on. If you’re designing pay, you have to think about the measures and goals that drive shareholder value. What I’ve focused on over the years is not only understanding compensation, but also the strategic and financial context and drivers of value,” she said. “Our whole profession has to strive for this type of understanding and insight.”

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