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FCPA Blog – Finding perverse incentives is hard, fixing them can be harder
Identifying perverse incentives within a company can prove difficult, and can be even more challenging when found. Partner Marc Hodak shares how to prevent these issues, and well as what to do to find and correct them in the final part of his five-part series.
Read More > 03.16.2017
Research
2017: Global Trends in Corporate Governance
Farient Advisors, in conjunction with its partners in the Global Governance and Executive Compensation Network (GECN), a select team of premier independent advisory firms specializing in compensation and governance challenges, undertook an unprecedented study covering 17 countries spanning six continents to gather insights into global corporate governance practices in three…
Read More > 03.15.2017
Uncategorized
Short-Term Gain, Long-Term Pain
The Issue Shareholders complain about executive pay systems that reward for short-term gains while they are left holding the proverbial bag well after performance has waned. With the heavy mix of long-term incentives in executive pay programs, our executive pay system is seemingly long-term in nature, but can still miss the…
Read More > 03.10.2017
Uncategorized
Linkage Between Business and Compensation Strategies
The Issue There is at least one thing about which boards, management, shareholder advisors, and shareholders all agree: a company’s executive pay program should link to its unique business strategy. In one of NACD’s Compensation Committee Chair Advisory Council meetings, of which Farient is a co-founder and current partner, the group…
Read More > 03.10.2017
Uncategorized
Managing Equity
The Issue Over the last several years, shareholder advisors have been continuously squeezing dilution caps. No doubt, most companies feel as though they are constrained in their use of equity. Using too much equity provides strong attraction, retention, and alignment incentives, but gives away so much of the pie that…
Read More > 03.10.2017
Uncategorized
Investor Perspective on Executive Compensation
The Issue Over the past several years, investors have been laser-focused on executive compensation. From Say on Pay to pay and performance alignment, clawbacks and the CEO to Median Employee Pay Ratio provision, the provisions of Dodd-Frank Wall Street Reform and Consumer Protection Act, pending or otherwise, have created more…
Read More > 03.10.2017
Uncategorized
Goal Setting
The Issue Farient believes that of all the design features of compensation, goal setting has one of the most significant effects on alignment. Goal setting is all about striking the right balance between establishing measures and setting goals that are at once motivational to executives and accretive to shareholders. Historically, most…
Read More > 03.10.2017
Uncategorized
Compensation Committee Process
The Issue Good processes not only lead to better decisions, but also a better record that the Compensation Committee engaged in the appropriate discussions. Yet, even the most basic processes often are steeped in tradition and culture, and can be difficult to change. Usually, Compensation Committee members know when the process…
Read More > 03.10.2017
Uncategorized
Succession Planning and Executive Compensation
The Issue Who will be in charge of your company if the unthinkable happens? Reinforcing what we have seen in a number of high-profile cases, as well as studies from Stanford University’s Rock Center, Towers Watson and Korn/Ferry, among others, most companies do not have an effective CEO succession plan.
Read More > 03.10.2017
Uncategorized
Pay for Performance Alignment
The Issue Although we anticipate several provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act will be eliminated [or minimized] over the next few years, we believe most of the executive compensation provisions will survive in one form or another. When we consider that many companies have voluntarily…
Read More > 03.10.2017
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