Pay for Results: Aligning Executive Compensation with Business Performance

Increased shareholder transparency around the world is elevating the topic of executive pay for performance from merely “obligatory mention” to “need to demonstrate and clearly communicate.” However, the numerous incentive approaches and combinations and their implications can be dizzying even to the compensation professional, not to mention the company′s board of directors who must approve the program and its rationale.

Pay for Results: Aligning Executive Compensation with Business Performance equips HR, compensation, and finance executives and boards of directors with a practical road map to follow in developing and implementing executive incentives that help drive business needs and strategy and can pass the tests of board approval and good proxy disclosure.

This groundbreaking guide to imple– menting the executive incentives that drive business needs and strategy is based on Mercer research results and client case studies and reveals how to design a remuneration plan that builds competitive and strategic advantage.

Filled with specific analytic tools including tables, exhibits, forms, and checklists, Pay for Results covers:

• The definition of good performance

• Performance as value creation

• Value creation demystified

• An introduction to Mercer′s performance framework

• The science and art of metric selection

• Peer comparison

• Taking the guesswork out of target setting

• Calibrating pay and performance

• Designing incentive plans for maximum flexibility

• The benefits of a performance measurement mindset

Designed to develop executive incentives that can satisfy new norms for sound corporate governance and transparency, Pay for Results uncovers myths in performance measurement strategy and design, exploring how to avoid problems by considering the factors that can lead to the right measures and the right results.

Take your measurement practices and executive remuneration programs to a new level

Change is in the air, and companies must meet the challenge of performance measurement head–on to ensure that their remuneration programs are reasonable and defensible to all stakeholders. Authoritatively written by Mercer, Pay for Results is a go–to resource for directors and management to partner together to make pay for performance a reality before regulatory and legislative bodies and shareholders take matters into their own hands.

A wake–up call for a demonstrable link between pay and performance, this essential resource for HR, compensation, and finance executives illustrates how to apply performance metrics that align with shareholder investment and strengthen the incentive program business case.

Pay for Results equips you with the necessary tools to:

• Abandon the guesswork and start making informed decisions based on hard research, in–depth quantitative analysis, and intelligent discussion

• Stop working backwards by agreeing on a definition of value for your organization up front

• Use business strategy as the basis for selecting performance metrics, rather than relying on what competitors or analysts tell you to measure

• Use both internal planning and external trends and economic data to set externally informed performance targets that will motivate your executive team to shine and let your shareholders sleep at night

• Test the relationship between award and performance levels thoroughly to make sure that pay outcomes will be reasonable under all performance scenarios both strong and weak

• Make your measurement system a high–impact one by anticipating problems before they happen and investing the necessary time and resources in implementation

Based on Mercer research results and client case studies, Pay for Results provides executives with a practical benchmark to follow in developing and implementing executive incentives that help drive business needs and strategy.