In today’s environment, it is difficult for organizations to be confident about their executive pay design. The regulatory landscape is ever-changing. The stock market and the economy at large remain unpredictable. Furthermore, the “innovations” of proxy advisors have meant that many executive pay designs have acquired bolt-on programs during their evolution, which now hamper efforts to gain an overview of the whole program in various performance scenarios.
At Korn Ferry, we have the data, resources and expertise to determine what is happening in your business right now and where it needs to be in the future. We bring much-needed clarity to executive pay programs by developing a deep understanding of an organization’s unique market, business strategy and executive population, and using those insights to provide independent and objective advice. We work to create smart, forward-thinking frameworks outlining critical next steps for the business - beginning with working sessions aimed at profiling a range of catered design constructs. By digging deep and thinking strategically, we create executive pay programs that align with business strategy - and incentivize and inspire management to drive short- and long-term value.
We apply four basic principles to every design:
Pay must balance the needs of executives and shareholders. We develop reward programs that attract and motivate executives while paying heed to shareholder expectations.
Reward should fit context. Pay recommendations must account for performance expectations, the strategic value of executive roles, and the wider business and shareholder environment. External comparisons are helpful, but they shouldn’t dictate what you pay.
Sometimes it’s OK not to tick the boxes. Shareholder pressures don’t always dovetail with business needs. What’s important to the business won’t always meet the guidelines set down by institutional watchdogs.
Clarity, transparency and simplicity are the watchwords. Pay programs are only effective if their value is clear to the executives receiving them. We ensure that metrics are understood, payout conditions make sense, and there are no ‘moving parts’.
WHY KORN FERRY?
For many consulting firms, the primary objective is keeping their executive pay program “clean” and out of trouble with proxy advisory firms. While this is a key consideration, it is not the defining feature of our approach. Instead, what sets our solutions apart is:
- We take a business-first approach. Our executive pay programs align with business strategy and allow for potential volatility in business results.
- We provide the right solution for you. We are committed to understanding your strategy and operating model; we review your reward programs in context and tailor them for future success.
- We know people. The objective of an executive pay program is to guide and reinforce the behavior of leaders to align with company goals – and nobody is as experienced and knowledgeable about executive considerations and behavior as Korn Ferry.