Fair or not, in business, certain functions are more important than others, and their compensation should reflect that. Yet, Chief Executive’s CEO & Senior Executive Compensation Report for Private Companies, which reports on compensation practices at more than 1,600 private companies, shows that too many firms do just the opposite, averaging out executive compensation across their entire team in search of “fairness.”
According to our research, companies across all revenue sizes—and more so at the higher end—report setting specific salary ranges for specific positions. The problem with this compensation strategy? You lose your ability to reward, retain and motivate superstars for key positions. And you need superstars to win.
But—contrary to what you may think—you don’t need all your top people to be superstars. The trick is to determine where you need them, pay what you need to pay to get them—and cut back where you don’t. A top-decile executive (paid a superstar top-decile executive salary) is not going to be warranted in every C-Suite position. For instance, at an early-stage biotech company, the head of research and development may be the most critical person, so you’ll need a superstar vs. just a good or very good performer. The vice president of sales and marketing? Maybe not as important in this type of organization at this stage of the game (though that could change when you’re ready to go to market).
There’s no set rule as to what that blend is or which position warrants top-quartile or decile compensation—every company will need to figure out the right formula—but a good starting point in getting the formula right entails weighing the following:
• Your company’s growth stage
• Your industry and business model
• Compensation benchmarks for your industry and specific roles
• Your ownership model
• Your overall balance sheet
Once you do that, you can figure out who on your team should be given a superstar salary and who just needs to be a good performer. That, in turn, will enable you to better understand how you should divvy up the executive compensation pie by further benchmarking what your rivals are willing to pay. This can also lead to potential opportunities to recruit superstar executives to fill specific needs.
Find more best practices on executive compensation strategies.
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
