Examine Compensation Decisions Carefully in the Case of a Demotion

Whether a demotion is prompted by an internal reorganization, a merger or the need to better match an employee's skills to a different position, compensation is a major factor when determining how to best navigate the change. 

Shifting compensation is more clear-cut when an employee knowingly applies for, interviews for and accepts a different position within the same company that carries less responsibility and pay. However, when an employer initiates a worker's demotion, one of the biggest considerations is how to handle morale and performance issues if the employee’s pay is decreased — or how to address pay equity questions that may arise if the employee's higher salary remains in place.  READ MORE

Equal Pay Transparency Hearing Scheduled in Colorado

On September 29, Colorado’s Department of Labor and Employment released its proposed Equal Pay Transparency (EPT) rules. The update is aimed at providing clarity on the state’s Ensure Equal Pay for Equal Work Act. SB23-105, which comes into effect on January 1, 2024, amends Colorado’s pay transparency statute.

A public hearing on the proposed rules is scheduled for October 30, 2023. If adopted, the Equal Pay Transparency rules will also take effect from January 1, 2024. READ MORE

The CEO Shareholder: Straightforward Rewards for Long-term Performance

To be successful, companies need to attract and reward leaders who create value over the long term, but executive remuneration often focuses on short- term targets. Shareholders and their advisors similarly focus on short-term returns as a primary metric in the evaluation of pay plans. Replacing these short term-oriented approaches with direct long-term stock ownership by executives is a better solution.

It’s no surprise that executive remuneration stands out as one of the most visible and closely examined aspects of a publicly listed company’s corporate governance program. READ MORE

California Announces 2024 Substantial Increase in Computer Professional Exemption Compensation Rate

The minimum wage thresholds for the California computer professional exemption have been raised in line with inflation. The California Department of Industrial Relations (DIR) published a memo on October 17, 2023 increasing the compensation threshold for exempt computer professionals by 3.3% over the 2023 rates. The compensation rates are adjusted annually to account for inflation according to the California Consumer Price Index (CPI) for urban wage earners and clerical workers. READ MORE

Microsoft CEO Satya Nadella and other executives take a big hit to compensation

Every year Microsoft is required to submit a regulatory filing that includes compensation for its CEO and other top executives. In the most recent regulatory filing for fiscal year 2023 submitted by Microsoft, we are able to see that Microsoft's C-suite has had a substantial reduction in its compensation over fiscal year 2022. This was mostly due to the company missing several of its financial targets for the year. We have a breakdown of the compensation numbers and what it means on a larger scale. READ MORE

Why pay transparency won’t work without real pay equity transformation

When it comes to the drivers behind increased pay transparency, a new survey has found that the stick is taking priority over the carrot.

According to WTW’s 2023 Pay Transparency Survey, regulatory requirements are, by far, the most commonly cited (81%) factor for encouraging greater levels of pay program communication. Coming in a distant second, third and fourth—in a near dead heat—are company values and culture (55%), employee expectations (54%) and an ESG/DEI agenda (53%). READ MORE

Michigan elections board deadlocks on a new $15-per-hour minimum wage initiative

A group seeking to raise Michigan's minimum wage is headed to court after the Michigan Board of State Canvassers deadlocked on its certification for the ballot over a change in its petition language.

The petition's definition of an employer bound by the state's minimum wage changed significantly between when the board approved summary language in January 2022 and when it authorized other items on the form in February and March 2022 — so much so that the changes would exempt 90% of Michigan businesses from paying any sort of state minimum wage. READ MORE

8 Industries Where a Six-Figure Salary Will Make You Happy

Does money buy happiness, as the saying goes? An old study from 2010 found that once you reach annual earnings of $75,000, money doesn’t make you that much happier.

Inflation, a pandemic, and rising housing costs may have changed that number since 13 years ago. Moneyzine.com recently surveyed 1,200 Americans to see if they are happy with their income. For eight professions polled, it takes at least six figures to be happy. Four other professions come in over the $75,000 mark, while most hover close to it. READ MORE

Netflix Promises ‘Substantial Changes’ to Executive Pay Model After Shareholder Pushback

Netflix has promised to make “substantial changes” to its executive pay model after significant shareholder pushback regarding the sizable pay packages.

“We recognize we don’t have wide support for our executive compensation model of the last 20 years. We are listening to our shareholders and plan on substantial changes for 2024 to a more conventional model,” Netflix said in its third quarter earnings statement. “Our executive compensation plan will continue to be built on pay for performance.” READ MORE

Are America’s CEOs overpaid?

“We’re fed up with falling behind,” declared Shawn Fain, the boss of America’s United Auto Workers (UAW), last month after the union began a campaign of intermittent strikes at Ford, General Motors (GM) and Stellantis, America’s “big three” carmakers. A month in, the two sides are still at loggerheads. Jim Farley, Ford’s chief executive, has argued that the 36% pay rise over four years demanded by the striking workers would cripple his business. The UAW has countered that the average pay of the big three’s CEOs is 40% higher than it was in 2019, compared with 6% for the union’s members, which is well below inflation. Last year Mr Farley raked in $21m in pay, Carlos Tavares, his counterpart at Stellantis, $25m and Mary Barra of GM, $29m. The average full-time UAW member made less than $60,000. READ MORE

How an ‘Effort-Reward Imbalance’ Can Make Work Miserable

Life isn’t fair.

It’s a phrase so often repeated that it has become a cliché. But studies have shown that humans are hard-wired to want their fair share, as are other animals that have cooperative relationships, like monkeys, birds and wolves.

In one famous experiment, researchers trained two capuchin monkeys to hand them tokens in exchange for a cucumber snack. At first, the animals were happy with this arrangement — that is, until one of the monkeys received grapes instead, which are considered far more delicious. The other monkey, who continued to receive cucumbers, looked enraged, shook the walls of her enclosure and hurled the cucumbers out of reach. READ MORE

Negotiating the best compensation and executive perks package

The unemployment rate in the United States has remained below 4 percent since January 2022, according to the Bureau of Labor Statistics. Competition for workers is high across many sectors. Anecdotally, demand for executives at various levels in the Lehigh Valley is consistently strong. This market dynamic is one reason that compensation and perks are key components of any executive’s decision to join a new company or remain with their current employer.  

 Company perks and compensation packages should be a key decision-making factor for any executive because those packages can have a huge impact on their financial future. A 2021 report from Harvard Business Review analyzed compensation of top executives at all Russell 3000 companies and found that only 18 percent of their compensation was base salary; the remaining 82 percent was variable. Those variables, such as stock options, are precisely what’s laid out in compensation and perks packages. READ MORE

Caution Advised: Use of DEI Performance Goals in Incentive Compensation

Recent court decisions have ruled that certain race-based college admissions programs violated the Equal Protection Clause of the Fourteenth Amendment of the U.S. Constitution. While these decisions do not apply directly to private employers, some observers expect them nevertheless to encourage more scrutiny of affirmative action policies or practices in the private sector. READ MORE

Beyond the paycheck: The key to building a thriving workplace goes beyond salaries

Today’s news is filled with stories highlighting salary figures, from sky-high CEO compensation packages to boards trying to hide CEO pay increases during periods of austerity, to governments interfering with collective bargaining over wage increases and unions securing pay hikes.

Some provinces, including Ontario, Alberta and Nova Scotia, are also mandated to release annual sunshine lists of public sector workers who earn above $100,000 — all of which might suggest that higher pay equates to more productive, healthy and safe workplaces. But is this a correct assumption? What if the opposite is true? READ MORE

This is How Much Less Remote Employees are Willing to Accept in Salary

As much as companies are trying to get employees back into offices, those who had a taste of remote work during the pandemic are increasingly resistant to the idea. So much so that workers are willing to take a pay cut to work from home.

This is according to Stanford University economist Nicholas Bloom; a leading voice in remote-work research. Bloom told USA Today that the average prospective employee is willing give up about 8 percent in annual salary for a job that is partly or fully remote; or about $4,600 per year based on a median U.S. salary of $57,200 for full-time workers. READ MORE

Is The Big Law Salary Bonus Worth The Hours?

Big law firms are known for their high salaries and generous bonuses, making them an attractive option for many law school graduates.

But bonus payments by big law firms are changing as they pay special bonuses, during COVID, and ‘extra’ payments, while boutique law firms are sometimes outpacing big law firms in their bonus payments. But some firms are also using bonuses as a ‘stick’ to get associates back to the office. READ MORE

Leaked Microsoft pay guidelines show salary ranges as top employees get millions

Leaked pay guidelines reveal that Microsoft employees can be awarded over $1million as a hiring bonus, $1million in stock, in addition to over $300,000 as a base salary.

The banding system sees new hires receiving different levels of pay ranges for base pay, hiring bonuses, and annual stock awards. According to Business Insider, the guidelines were published earlier this year and are used by hiring managers to decide how much to offer new hires, according to a person with direct knowledge of the process. READ MORE