Is your company offering competitive compensation packages?

As we approach the end of an academic year, many soon-to-be college graduates are entering the job market. After numerous conversations with students in the past couple of weeks, one theme has emerged.

Many students consider salary as the end-all, be-all. And while salary is important, it may not be the most important aspect of an offer to consider. The organization’s culture is important, plus the benefits package can make or break the deal. Due to space constraints, let's focus only on salary and benefits, not culture. READ MORE

Use of TSR as Incentive Pay Metric Flattens Out

In response to regulations that took effect following the passage of the Dodd-Frank Act, as well as pressure from proxy advisers and investors, it became common practice for executive compensation to be based on company performance.

Relative total shareholder return (rTSR) — a measure of TSR compared with that of other companies, usually a peer group of some kind — emerged as the leading metric for determining long-term incentive payouts for named executive officers. READ MORE

Wells Fargo publishes sales scandal findings, seizing $75 million in compensation from 2 former executives

Wells Fargo's board of directors today released a report on the company’s sales scandal that has rocked the bank since September, saying it will seize more than $75 million worth of compensation from two executives at the heart of the dispute.

The 113-page report was highly critical of former CEO John Stumpf and former head of community banking Carie Tolstedt.

Stumpf "was too slow to investigate or critically challenge sales practices in the Community Bank," the report said. "He also failed to appreciate the seriousness of the problem and the substantial reputational risk to Wells Fargo." READ MORE

BP cuts CEO pay by $8 million after shareholder revolt

CEO Bob Dudley's total pay package for 2016 was cut by 40% to $11.6 million, BP said in its annual report.

The reduction follows a rare shareholder revolt last year when 59% voted against Dudley's 2015 pay and benefits package worth $19.6 million.

Shareholders protested his pay getting bumped up 20% despite a weaker performance by BP (BP) in 2015, when it reported an annual loss of $5.2 billion and its share price slumped. Dudley still got his money since the vote wasn't binding. READ MORE

Branstad signs bills limiting workers' compensation, blocking minimum wage hikes

Gov. Terry Branstad on Thursday signed into law two controversial pieces of legislation — one blocking local minimum wage hikes and another scaling back the state's workers' compensation laws.

House File 295 rolls back minimum wage increases already approved in five Iowa counties, including in Polk County where the new wage of $8.75 an hour was set to take effect April 1. Johnson, Linn, Wapello and Lee counties also have raised their minimum wages. READ MORE

Equal Pay Day: How does your compensation compare?

See Dick and Jane. Dick and Jane are the same age, earned the same college degree, have two years of the same work experience, are employed by the same company and hold the same job title. The only difference? Dick makes $50,000 per year and Jane only makes $40,000.

April 4 is Equal Pay Day, which symbolizes how far into this year that Jane must work to earn the same amount that Dick earned in the previous year. Her education, skills, experience and job responsibilities are the same as Dick’s, but Jane makes 80 cents for every dollar that Dick is paid. Why? Because Jane is female.

Did reading this story about two fictional characters make you angry? It should, because for many women, this isn’t a fictional story. READ MORE

All of Your Questions About Employee Stock Options, Answered

Maybe you’ve paid your dues for years and are finally being tapped for upper management. Or perhaps you’re being recruited by a tech startup who wants you to get in early on a big venture.

In either case, a company may try to woo you with a compensation package that includes stock options, which are used to tie your total pay to the company’s performance so that if the company does well, you do well. While stock options won’t pad your paycheck right away, they can help grow your wealth in the long run.

But if you’ve never had to deal with stock options before, it’s easy to get overwhelmed by all of the jargon. So we’ve collected eight of the most common terms you might come across and decoded them, so you’ll know what, exactly, you’re being offered. READ MORE

Iowa House OKs bill to abolish compensation boards

The Iowa House voted to abolish compensation boards and place responsibility for setting county elected officials’ salaries with boards of supervisors.

“If supervisors want to give themselves a raise, then own it,” bill manager Rep. Megan Jones, R-Spencer, said about a bill she said was about “smaller, smarter government … truth in government … transparency in government.”

The House also approved changes in domestic abuse sentencing laws and modified Department of Transportation enforcement officers’ authority. READ MORE

Performance Management: Lessons from Professional Baseball

Spring means a few things for me but especially spring training for professional baseball and geeking out over how to get the most out of the talent on my favorite team (both on the baseball diamond, and in my office). Baseball performance metrics have changed over my lifetime. I watch expectantly at the promise of equivalent change in non-baseball employers as I read articles like “The Performance Management Revolution” in the Harvard Business Review.

Let me expedite that change by sharing how businesses might copy the Pittsburgh Pirates. READ MORE

Former Valeant CEO sues company over unmade compensation

Former Valeant Pharmaceuticals International Inc Chief Executive Michael Pearson has filed a lawsuit against the Canadian drugmaker, alleging it refused to pay him more than 3 million shares he is owed, the Wall Street Journal reported on Monday.

Based on Valeant's stock price of $10.81 at the close of trading Monday on the NYSE, the shares have a market value of about $32.43 million. READ MORE

Wells Fargo to pay $110 million to settle fake account suit

Wells Fargo has agreed to pay $110 million to settle a class-action lawsuit over up to 2 million accounts its employees opened for customers without getting their permission, the bank announced Tuesday.

It’s the first private settlement that Wells has reached since the company paid $185 million to federal and California authorities late last year. Authorities said bank employees, driven by high-pressure sales tactics, opened the bank and credit card accounts without customer authorization. READ MORE

WILL ACA REPEAL EFFORTS IMPACT EXECUTIVE PAY PRACTICES?

The House Republican health-care proposal, the American Health Care Act (H.R. 1628), would modify or repeal in part the Affordable Care Act tax provisions impacting executive pay for health insurers, among other changes.  See related story, How Will The Proposed AHCA Be Different From the ACA For Employers?

Health insurers and executive compensation experts are keeping a close eye on American Health Care Act developments, including the House floor vote scheduled for March 23.  The proposed repeal of the ACA-mandated tax provisions would be effective for tax years beginning after Dec. 31, 2017. READ MORE

Executive Compensation Commands Board Committee Expertise

There's no question the responsibilities of the board's compensation committee have escalated, particularly since the 2008 financial crisis and with passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) in 2010. The legislation required regulators to demonstrate a link between executive pay and the performance of the corporation. Since joining the National Association of Corporate Directors (NACD) 16 years ago, CEO Peter R. Gleason spearheaded a wide range of research and education initiatives that track the changing dynamics of the boardroom and the increased expectations on the directors' role. During our conversation, Gleason, who was promoted to NACD president in 2014 and became CEO of the now 40-year-old organization in January, reflected on the evolution of the compensation committee and, in particular, on the ongoing need for director education.  READ MORE

Wells Fargo CEO got nearly $13 million in compensation in 2016

Wells Fargo & Co. awarded Chief Executive Timothy Sloan $12.83 million in compensation for 2016 after he took over the embattled bank this fall following its sales practices scandal.

Sloan received $2.33 million in base pay, with a bonus that included shares valued at $10.5 million. He, along with seven other executives, didn’t receive a cash bonus this year compared with $1 million Sloan received for 2015 and the $4 million that his predecessor John Stumpf received in cash bonus that year.

The lack of cash bonus along with up to 50% reduction in certain stock awards for 2016 was meant to reflect the $185 million fine the bank paid last fall for opening as many as 2.1 million accounts using fictitious or unauthorized customer information. READ MORE

IS YOUR COMPANY SAFE? THE LINK BETWEEN STOCK OPTIONS AND ACCOUNTING FRAUD

The sun always rises. Time is unidirectional. Financial wealth can beget greed. All are fundamental truths of the universe. With regard to the last, is it possible to theorize on the link between performance-based corporate executive compensation and accounting fraud? How do we determine what separates Chief Executive Officers (CEO) such as Jeffery Skilling and Kenneth Lay from the failed conglomerate Enron from perceived highly successful CEO’s such as Jack Welch at General Electric? All of the former corporate executives were handsomely compensated in company stock options, so is it really possible to derive a correlation between corporate pay metrics and fraud? We dive deeper for answers. READ MORE

We Know Female CEOs Get Paid More, But We Don’t Know Why

Last spring Equilar, an executive compensation firm, released a headline-grabbing study on gender and CEO pay. In a survey of 341 S&P 500 companies, it found that the 17 female chief executives in the group made nearly $8 million more on average than their 324 male counterparts. Some in the media responded with shock and excitement (Fortune called it, for example, “a reverse gender gap”), while others cautioned about the report’s small sample size. But these findings are supported by two rigorous academic studies: One found that women who hold, or are likely to hold, senior management positions earn up to 10% more than their male peers. Another found not only that female CEOs are paid more than male CEOs but also that nonwhite CEOs (African-American, Asian, Hispanic, and Native American ethnicities) are paid more than white CEOs. READ MORE

Executive Compensation Developments

The general counsel should anticipate questions from the board and its executive compensation committee from recent media coverage of executive compensation (especially in the nonprofit sector). This increased focus has concentrated on issues relating to reasonableness of compensation, and the use of compensation to reward particular organization and individual success—and to hold executives accountable for shortfalls in leadership or performance. READ MORE