Pay Design and Decision Support
From Intent to Outcomes
Pay program design translates strategic intent into outcomes. Our team designs pay programs that result in defensible and appropriate decisions and actions, as well as adherence to standards of good governance.
Composition of Goal Setting
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 and other stakeholders.
This service includes:
Our team develops pay structures that support each company’s strategic intent (e.g., to scale, attract critical talent in highly competitive markets, etc.)
We develop all aspects of pay programs including vehicles, performance measures, and other design features.
The intersection between pay and performance is goal setting. Using our “360-degree” framework, we analyze and forecast performance based on shareholder expectations, historical competitive reviews, and gaps between expected and actual performance. This informs goal ranges including thresholds, targets, and maximums, and creates confidence that pay will align to performance.
We analyze competitive dilution, proxy advisor caps, and equity needs to recommend equity pool authorizations and the disciplined use of equity. We also determine equity requirements and the optimal timing for requesting additional shares.
Our team reviews planned compensation actions to determine whether they are consistent with the stated pay strategy and the implications when inconsistencies exist.
Related case study
Building Incentives in a Manufacturing Company
This global manufacturing company had issues ranging from poor compensation practices to above-median target pay positioning, single-trigger change in control, no burn rate commitment, and way too much discretion—all of which contributed to 37% Say on Pay support.
We’re Here for You
Let us know how we can help you think differently about executive compensation and its alignment with performance.