Key trends in compensation planning

As organizations gear up for the challenges and opportunities of the next several years, strategic compensation planning takes center stage. The evolving landscape of work, coupled with societal shifts and technological advancements, necessitates a forward-thinking approach. This article provides several key analytics that Human Resources (HR) professionals should consider as part of their compensation planning process. The key trends outlined below provide invaluable insights for businesses aiming to stay competitive and responsive to the dynamic needs of their workforce. READ MORE

New Year, New Rules? 2024 May See Implementation Of The DOL’s Proposal For Increased Exemption Salary Thresholds While State-Specific Thresholds Are Also Set To Increase

As 2023 comes to a close, so did the notice-and-comment period for the U.S. Department of Labor’s (DOL) proposed rule increasing the minimum salary required for employees to be exempt under any of the “White Collar Exemptions” from overtime pursuant to the Fair Labor Standards Act (“FLSA”). With that period closing in November, it can be anticipated that steps will be taken in the upcoming election year to implement the new rule.

As a reminder, and as explained in our previous blog post, the DOL has proposed the threshold salary level for exemption from overtime be raised from $35,568/year ($684/week) to $55,000/year ($1,059/week). It also proposes increasing the Highly Compensated Employee exemption threshold to $143,988 annually. The rule will not modify the duties necessary for exemption qualification. Employers may wish to keep these thresholds in mind as they review and implement compensation decisions in the new year. READ MORE

Here's how much the salary of a Tesla new hire is in 2023

Whatever your opinion may be on Elon Musk and Tesla  (TSLA) - Get Free Report, the company is part of the Magnificent Seven for a reason. And while the Tesla stock price has still not returned to peak 2021 levels, it still had an incredible year with growth of about 137% year-to-date.

The vehicle and energy company continues to hire new blood despite some layoffs earlier in the year and a key change in the hiring process triggered by founder Elon Musk. As of the end of 2022, Tesla had around 130,000 employees, hiring about 30,000 during the calendar year. READ MORE

Scandal-hit companies which went after executive compensation

BP (BP.L) on Monday cut over $40 million in compensation from former CEO Bernard Looney after the British oil giant concluded he had knowingly misled the board over personal relationships with colleagues.

Looney resigned in September after less than four years in the top job for failing to fully disclose details of past personal relationships with colleagues.

The following is a list of companies whose executives had to forego their bonuses or pay them back after being hit by scandals. READ MORE

How startups shifted their compensation strategies in 2023

“The last couple of years of compensation have been probably the craziest that I’ve ever seen. And I’ve been working in comp for over 20 years now,” Josh Steinfeld, principal product strategist at Carta, a total compensation platform, told HR Brew.

Startup compensation, in particular, has been particularly susceptible to volatility in the wake of a 2021 hiring boom that saw HR departments scrambling to fill labor demand. This boom cycle came to a halt when the Federal Reserve started raising interest rates to slow lending, and venture capital funding slowed considerably. READ MORE

Morgan Stanley Seeks Redo of Court’s Deferred Compensation Ruling

Morgan Stanley asked a federal judge to “reconsider” his November ruling granting its motion to compel former brokers to arbitrate their disputes about allegedly unpaid deferred compensation. 

Although the U.S. District Judge Paul G. Gardephe in Manhattan decided partially in Morgan Stanley’s favor, he also concluded that the wirehouse’s deferred compensation plan should be governed by federal pension law, specifically, the Employee Retirement Income Security Act of 1974. READ MORE

Tesla skips employees' yearly merit-based stock compensation

Tesla is not offering its employees yearly merit-based stock awards, Bloomberg News reported on Tuesday.

Tesla did not immediately respond to Reuters' request for comment.

The news comes after United Auto Workers union said in November it is launching a first-of-its-kind push to publicly organize the entire nonunion auto sector in the U.S., including Tesla, after winning new contracts with the Detroit Three automakers. READ MORE

Report Validates CEO and C-Suite Pay Disparities Grow with Company Size

In anticipation of the new year, a new report from ON Partners delves into major shifts impacting the business world, including average compensation rates by company size, geo-market hiring demand, and industry sectors experiencing the greatest shifts in talent management strategies. “This year’s report leverages transparency and data innovation, specifically as it relates to overall compensation for the executive marketplace,” said Tim Conti, co-president of ON Partners. “Through our research, we were able to confirm trends in CEO and C-suite compensation and a rise in executive recruitment in Middle America.” READ MORE

Preparing for Year Two of Pay versus Performance Disclosures

The SEC’s final Pay versus Performance (PVP) disclosure rules were issued on August 25, 2022. Given the number of implementation issues that were raised as companies struggled to comply with the new rules, the SEC staff issued several Compliance and Disclosure Interpretations (CDIs) to clarify the disclosure requirements: fifteen CDIs were issued on February 10th, nine CDIs were issued on September 27th, and ten CDIs (including revisions to two prior CDIs) were issued on November 21st.

This Viewpoint highlights some of the most important SEC guidance that companies should consider in preparing their 2024 PVP disclosure. READ MORE

Older Americans Are Now Earning Almost as Much as Younger Workers

Americans working beyond retirement age has almost doubled since the late 1980s and the wage gap between them and their younger colleagues is shrinking, according to a Pew Research Center reportOpen in a new tab. 

Not only are older workers increasing in number, but their earning power has grown in recent decades, according to the Pew report. In 2022, the typical worker age 65 or older earned $22 per hour, up from $13 in 1987. Earnings for younger workers haven’t grown as much. As a result, the wage gap between older workers and those ages 25 to 64 has narrowed significantly.  READ MORE

SAP to Treat Share-Based Compensation as Regular Expense

SAP will start considering share-based compensation as a regular expense in the new year, part of changes to the software company's financial reporting practices it said were aimed at increasing the transparency of its operating results.

The Walldorf, Germany-based group said Monday that it would include share-based compensation expenses in its non-IFRS results starting Jan. 1, meaning the move will initially affect SAP's first-quarter results to be reported on April 22. SAP's 2023 results won't reflect the change, but guidance for the new year--expected to come Jan. 24--will factor in the new accounting, which could also feed into potential updates of its 2025 targets. READ MORE

More than half of US professionals have asked or want to ask a co-worker’s salary

As salary transparency laws crop up across the country, workers, too, are welcoming the change. 

All generations of employees in the workforce rank lack of salary transparency, along with unclear or unreasonable job responsibilities and poor communication with a hiring manager, among the top reasons they would withdraw their applications from open roles, a June report by talent solutions and business consulting firm Robert Half found.  READ MORE

ESG to factor strongly in 2024 executive pay plans despite pushback

Employers will continue to tie their executive compensation programs to environmental, social and governance, or ESG, factors in 2024 despite growing opposition to corporate ESG initiatives, WTW consultants said during a virtual presentation Thursday.

“ESG is here to stay — that’s a pretty strong consensus across the governance community,” said Don Delves, WTW managing director and the company’s executive compensation and board advisory leader for North America. “However, most boards and companies are focusing more on what key elements of ESG and other non-financial metrics are most important, most relevant and hold the most strategic value for their company and their industry.” READ MORE

Uber’s CEO Hides Driver Pay Cuts To Boost Profits

Uber is on a roll. Through the first three quarters of this year, Uber racked up over $2.8 billion in operating cash flow, while posting a 21% increase in global bookings. Investors have taken notice; Uber’s stock price has more than doubled year-to-date.

On his most recent earnings call, CEO Dara Khosrowshahi attributed Uber’s success to “the growth flywheel we built, coupled with rigorous cost discipline, enabling us to generate strong leverage to exit the year with tremendous momentum and reliable execution.” But cutting through corporate-speak, Dara (as he prefers to be called) failed to mention the biggest factor driving Uber’s growing profitability. Dara has gone back to an old trick in Uber’s playbook: cutting driver pay. But this time, with a clever change in how the company pays its US drivers, disguising yet another pay cut, and allowing Uber to take a much bigger cut of passenger fares for itself. READ MORE