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Pay for Results: Aligning Executive Compensation with Business Performance

Book Description

The numerous incentive approaches and combinations and their implications can be dizzying even to the compensation professional. Pay for Results provides a road map for developing and implementing executive incentives that drive business needs and strategy. It is filled with specific analytic tools, including tables, exhibits, forms, checklists. In addition, it uncovers myths in performance measurement strategy and design. Timely and thorough, this book expertly shows businesses how to drive their specific needs and strategy. Human resources and compensation officers will discover how to apply performance metrics that align with shareholder investment.

Table of Contents

  1. Title Page
  2. Copyright Page
  3. Preface
    1. Why Now?
    2. Why “Results”?
    3. Why This Book?
  4. Acknowledgements
  5. Chapter 1 - A New Day
    1. Executive Remuneration Governance
    2. Achieving the Right Balance of Interests
    3. Performance Measurement as the Key to Good Governance
    4. Change Is in the Air
    5. Pay for Performance Today
    6. Bringing Defensibility to Executive Remuneration
  6. Chapter 2 - The Million Dollar Question
    1. Performance as Value Creation
    2. No Magic Number
    3. Requirements for Effective Performance Measurement
    4. Metric Selection
    5. Linkage
    6. Goal Setting
    7. Time Horizon
    8. Striking the Right Balance
  7. Chapter 3 - Back to Basics
    1. Why Manage for Shareholder Value
    2. Systems Thinking
    3. Alignment of Internal and External Value Definitions
    4. Value Creation Demystified
    5. Balancing Growth and Returns
    6. Mercer’s Performance Measurement Framework
    7. Case Study: Performance Measurement at Manufacture Co.
    8. One Size Doesn’t Fit All
  8. Chapter 4 - Trust, but Verify
    1. Metric Selection in a Nutshell
    2. Market Research: A Limited, but Informative Tool
    3. The Science of Metric Selection
    4. The Art of Metric Selection
    5. A Balancing Act
  9. Chapter 5 - Making It Count
    1. Try, Try Again
    2. From Solutions to Guiding Principles
    3. Make It Motivational
    4. Make It Meaningful
    5. Make It Fair
    6. The Future of Scorecards
    7. Custom Solutions
  10. Chapter 6 - There’s Nobody Quite Like Us
    1. Why Peer Groups?
    2. Screening for Peers
    3. Desperately Seeking Peers
    4. When One’s Not Enough
    5. Maintaining Peer Groups
    6. Peer Groups in Practice
    7. What’s Next?
  11. Chapter 7 - You Don’t Need a Crystal Ball
    1. What’s Fair?
    2. Setting Performance Targets
    3. Internal Target Setting
    4. Externally Informed Target Setting
    5. Relative Target Setting
    6. Requirements of Relative Target Setting
    7. No Simple Answers
  12. Chapter 8 - Passing the Big Test
    1. Incentive Plan Leverage
    2. Leverage and Long-Term Incentive Vehicles
    3. Leverage and Goal Setting
    4. Simulation Modeling
    5. Maximum Award Caps
    6. Assessing Plan Costs for Reasonableness
    7. Passing the Big Test
  13. Chapter 9 - Now What?
    1. Designing Incentive Plans for Maximum Flexibility
    2. Dealing with Unavoidable Adjustments
    3. The Question of Discretion
    4. Dealing with Business Change
    5. Walking a Fine Line
  14. Chapter 10 - More Than the Sum of Its Parts
    1. Getting Started
    2. The Implementation Road Map
    3. The Benefits of a Performance Measurement Mind-Set
    4. Bringing It All Together: A Performance Measurement Checklist
  15. About the Authors
  16. Index