During the 2018 proxy season, publicly held companies began disclosing their CEO pay ratio, a Dodd-Frank rule that requires them to calculate the ratio between the compensation level of the median employee and the company’s CEO. Michael Kesner, a retired principal and consultant to Deloitte Consulting LLP, and Tara Tays, a managing director with Deloitte Consulting LLP, discuss the findings of a recent Deloitte analysis of CEO pay ratios based on data gathered from pay disclosures of 294 S&P 500 companies.¹ They also explain some of the challenges initial filers faced in complying with the pay ratio disclosure requirements and what companies can do to prepare for Year Two. READ MORE
FASB Issues Simplifications to Accounting for Nonemployee Share-Based Payments
Senate Appropriators Ignore Trump's Proposed Pay Freeze, Back 1.9% Raise for Feds
A Senate panel on Tuesday advanced spending legislation that would provide federal civilian employees with an across-the-board 1.9 percent pay increase in 2019, contrary to the White House’s request for a pay freeze. READ MORE
What's really going on with wages in America
Take-home pay picked up in 2015 and 2016, but it has since flattened out at annual growth rates that remain substantially below the 5% that workers enjoyed prior to the Great Recession.
There are lots of theories for why that's the case. But there are also lots of different ways of looking at wages themselves, and each data set can tell a different story. READ MORE
Is it time to take a hard look at your partners and compensation model?
Let’s take a deep dive into both a firm’s partner mix and its compensation model.
In a Good to Great research study on high-performing organizations performed by Jim Collins, he concluded that the method of compensation, as a causal factor for high and sustained performance, is largely irrelevant. The study found that whatever system is in use, it simply must be rational and equitably managed and that high sustained performance is largely the result of doing many things well. Jim emphasizes that the key to high performance is having the right people on the bus. READ MORE
4 Strategies for Recruiting and Retaining Successful Employees
With unemployment rates very low the competition for highly skilled loyal workers is more challenging now than ever before. Entrepreneurs must understand the critical importance of providing emotional and financial security to our employees as motivating forces to stay with our company. READ MORE
Pay Equity Law Update
On May 22, 2018, Connecticut Gov. Dannel P. Malloy signed Public Act No. 18-8, “An Act Concerning Pay Equity,” into law. The new Connecticut law follows a recent trend by states to enact laws prohibiting employers from seeking salary history from prospective employees. Connecticut now joins California, Delaware, Massachusetts (see below), Oregon, and Vermont as one of six states having such laws, which are designed to remedy historic pay disparities between male and female employees. READ MORE
Performance Management: One Simple Secret For Doing It Right
As a leader, it’s your responsibility to continuously communicate expectations, to define duties, and to help people accomplish strategic objectives. That’s your job. But, if you want to be great at performance management, there’s a little secret you need to understand. READ MORE
U.S. employers eyeing improvements to compensation programs
Growing pressure to improve their pay-for-performance programs and ensure fair pay throughout the workplace is sparking changes to corporate America's employee compensation and performance management programs, according to a new survey by leading global advisory, broking and solutions company Willis Towers Watson. READ MORE
Executive compensation planning for owner executives of private business after tax cuts and jobs act
The corporate tax rate applicable to C corporations (C Corps) has been reduced from 35 percent to 21 percent. Individual tax rates have also been reduced but not as significantly (from 39.7 percent to 37 percent). Individual tax rates on qualified business net income of pass through entities (S Corps, partnerships and LLCs) have been effectively reduced by 20 percent to 29.6 percent. This disparity in the effective tax rates creates some interesting challenges for planning executive compensation. READ MORE
The growing complexity of compensation strategies
As employers come under increasing pressure to boost pay for performance and employ fair pay strategies in the workplace, they’re rethinking the programs they already have in place, according to a new survey from Willis Towers Watson. READ MORE
Why Due Diligence Is Different For Roles Biased To Regular, Variable And Equity Compensation
As an executive onboarding into a new role, due diligence is a critical part of mitigating risk before accepting a job. The three main risks are always organizational, role and personal. But the components of those risks vary across roles with different compensation compositions. READ MORE
Minimum wage won’t let you afford a 2-bedroom rental anywhere in the U.S., report says
There's not a single state, county or metropolitan area in the entire United States where a full-time worker earning the federal minimum wage of $7.25 an hour can afford a modest 2-bedroom apartment.
And if those workers wanted to? They'd have to work 122 hours a week. Every week. All year. READ MORE
Does Creating Owners Mean Sharing Equity?
We think a good definition of employee engagement—real engagement—is employees who think and act like owners. Like businesspeople. Top companies foster this kind of involvement, sharing responsibility and rewards with people at every level of the organization. READ MORE
For the biggest group of American workers, wages aren't flat. They're falling.
The average hourly wage paid to a key group of American workers has fallen from last year when accounting for inflation, as an economy that appears strong by several measures continues to fail to create bigger paychecks, the federal government said Tuesday. READ MORE
Compensation plans entice good employees to stay
When it comes to employees, it is clear that good employees build meaningful relationships with customers, increase profitability, and give business owners more time to think strategically about the business.
Equally clear is that many business owners are interested in improving employee retention, as the cost to acquire and train new employees is considerable – especially for employees that are key contributors. READ MORE
Why Goldman Sachs Should Change Its Compensation Culture
In the 1990s, Albert Meyer was an accounting professor at Spring Arbor University, a small Christian college in Michigan. He had a background in forensic accounting, and through due diligence on one of the University's donors, exposed one of the biggest Ponzi-style frauds of the decade. READ MORE
Punishing Employers For Low Wage Workers Will Stigmatize Workers On Welfare
Democrats on Capitol Hill want to follow Seattle’s lead and tax large employers for the costs with which they allegedly burden taxpayers. The basic idea is if your jobs don’t pay workers enough to get them off all government benefits, then you are freeloading on the system and government should tax you to get the rest of your “fair share” of those workers’ living expenses.This all sounds compassionate and is designed to push corporations into paying workers more, but in reality such laws will have the unintended consequence of punishing and stigmatizing low wage workers. READ MORE
Minimum Wages Might Mean Fewer Benefits, So Let's Not #Fightfor15
A recent working paper from the National Bureau of Economic Research by the economists Jeffrey Clemens, Lisa B. Kahn, and Jonathan Meer should make us pause and question the wisdom of higher minimum wages. The economists explore how minimum wages affect the probability of employer-provided health coverage and find that a chunk of the increased earnings for workers who get higher wages will be offset by a reduction in employer-provided health coverage. READ MORE
Wells Fargo not alone: OCC finds sales abuses at other banks
Federal regulators have quietly ended a review of large and midsize banks’ sales practices that found several systemic issues — and hundreds of problems at individual institutions — and have no plans to make the results public. READ MORE