Human Resources Committee Advisor

Background

Our client has operations around the world with an executive team based in Canada, the US and Europe.  As the Human Resources Committee’s independent advisor, we have supported them for many years addressing a variety of executive compensation and related governance challenges.  The company has grown significantly so there was a need to manage growth and develop their processes to oversee the executive compensation programs.

Challenges

Given the significant growth of the company, including a sharp increase in share price, the executive team expressed concerns that they were not being fairly compensated.  We created a set of pay-for-performance analytics that demonstrated a strong relationship between share price and the realized value of their compensation.  As growth tapered, these analytics were used to demonstrate the pay-for-performance relationship to shareholders. In addition, the company had concerns about the retention profile of its compensation package, so we developed a set of analytics to test the concern and create a retention program that provided significant equity awards that would not fully vest until year eight. 

Results

Our client was comfortable with deviating from normal or “market typical” practices and we helped them navigate the different perspectives of various stakeholders, including the proxy advisory firms which had sometimes challenged their approach. The rationale for their approach was carefully disclosed which helped to mitigate potential concerns and demonstrated a strong strategic alignment between company performance and executive compensation. The executive team is intact and continues to deliver upon the company’s strategic priorities while the Committee is able to continue to mature its processes and effectively apply their judgment in the best interests of the company.