House bill aims to reduce effects of pay compression for senior-level feds

New legislation in the House is trying, at least in part, to address a years-long issue impacting some of the senior-most leaders in the federal government.

Del. Eleanor Holmes Norton (D-DC) introduced the Federal Employee Pay Compression Relief Act Tuesday, which aims to reduce the overall effects pay compression.

“This bill will allow many of the longest-serving federal public servants to receive the pay adjustments they are entitled to but for the pay cap,” Norton said in a press statement Tuesday. “This bill will help the federal government hire and retain the most qualified individuals for the job.” READ MORE

How Companies Can Steer Clear of Executive Pay ‘Landmines’

The indoor-farming company AppHarvest’s first two years as a public company have gone dismally, with losses totaling $375 million and the stock price falling to 35 cents.

So this might seem like an odd time for the board to vote to give itself a nice raise and to dole out nearly $2.5 million in special bonuses for four senior executives. The special-payout program unveiled in July by Morehead, Kentucky-based AppHarvest isn’t unusual—companies on the ropes often do this, saying it prevents a hemorrhaging of talent—but the negative headlines it generated across that state should serve as cautionary tale for companies trying to navigate treacherous times with minimal reputational damage. READ MORE

Raising the Minimum Wage Isn’t Good for Anyone

There are multiple issues with raising the minimum wage. It reduces employment and makes services more expensive to name a couple.

We can add another issue of raising the minimum wage to the list. A recent study shows that the raising of wages decreases the number of students that enroll in community college.

Researchers found that after minimum wages were raised, enrollment in community colleges dropped by 2% in year one and the drop increased to 4% by year five. Enrollment in four-year colleges remained unchanged. READ MORE

Sanders unveils $17 federal minimum wage bill

Saying 28 million U.S. workers would get a pay raise, Sen. Bernie Sanders, Ind-Vt., plus 29 other senators, introduced legislation to raise the federal minimum wage to $17 an hour by 2028, and entirely eliminate the so-called “tipped minimum wage,” raising those workers to minimum-wage status over seven years.

The measure builds on the long “Fight for 15 and a union” campaign. But corporate greed and business hatred for paying workers, especially workers of color, decent wages have prevented a nationwide hike for years. The “15” is now outdated. READ MORE

Biden to update 'prevailing wage' rule and boost construction worker pay

Construction workers could see their wages increase under the Biden administration’s plan to update a federal labor rule.

Vice President Kamala Harris will announce at an event in Philadelphia on Tuesday that the Department of Labor is preparing to issue a final rule to update the Davis-Bacon Act. The federal law was created in 1931 and requires the payment of prevailing wage rates to all laborers and mechanics on federal or federally assisted construction contracts. READ MORE

When an Entry-Level Candidate Wants an Above-Market SalaryThey cited their experience ... but they don't have any!

I am hiring someone for an entry-level position. It is meant for someone straight out of college and new to the field who is interested in learning a lot, meeting loads of highly connected people, and launching a potentially awesome career. I've set the salary to be a little above what other orgs our size do for this position to make it more competitive and retain staff. This seems to have worked well over the years. READ MORE

Understanding And Implementing Salary Transparency And Pay Equity

It’s hard to believe that in 2023 we still need to talk about a lack of pay equity—the principle that everyone, regardless of race, gender and age should be paid equally for doing the same work—in the workplace. The reality is that, on average, American women working full-time are paid 83.7% of what men are paid. This inequity affects Black and Hispanic women even more, as they're also more likely to be paid less than their white counterparts. READ MORE

CEO pay is always under fire. Founder salaries? Not so much

Public company CEOs are richly compensated. The median 2022 pay package for CEOs in the S&P 500 was $14.5 million, down slightly from the previous year, but more than double the median comp for S&P 500 CEOs in 2012. (In the same period, the federal minimum wage has remained flat, while median weekly earnings for full-time wage and salary workers in the U.S. grew roughly 36%.)

Founders, on the other hand, may not be paying themselves enough, says Waseem Daher, cofounder and CEO of Pilot, an accounting firm that serves startups and small businesses. READ MORE

Why Would a Board Approve Nine-Figure CEO Pay?

We recently published a paper on SSRN (“Mega Grants: Why Would A Board Approve Nine-Figure CEO Pay?”) that examines the practice of awarding “mega grants” to CEOs.

Mega grants are large, one-time equity awards with long vesting periods (up to 10 years) granted in lieu of or in addition to annual awards with the intended purpose of providing significant incentive to achieve long-term targets. Mega grants were popular in the late 1990s (having been awarded to the CEOs of Oracle, Walt Disney, IAC/Interactive, and others) but fell out of favor in response to shareholder criticism. A 2005 accounting change that required companies to record the fair value of equity awards in the financial statements further decreased the attractiveness of large-scale option awards. READ MORE

Corruption, Crime, and Compliance - How to Build a Compliance Compensation System

The DOJ is advocating for increased consequences for individuals who engage in misconduct or fail to exercise proper oversight, via the implementation of compliance compensation programs that include financial penalties. Companies need to develop incentives and penalties in a balanced manner to maintain ethical performance, while ensuring the potential for accountability. A crucial aspect of enforcing these policies is the execution of robust clawback provisions as part of the executive’s contract and bonus terms. These clawbacks can act as a deterrent for misconduct, and their enforceability largely depends on the clarity of their language, among other things. In this episode of Corruption, Crime and Compliance, Michael Volkov explores compliance compensation systems and their role in corporate governance in detail. READ MORE

Employers plan to raise pay next year as inflation and salary transparency lead to higher compensation expectations

The standard 3% annual pay raise will no longer cut it, largely due to inflationary pressures on everything from gas to household goods and higher employee wage expectations.

According to Payscale's Salary Budget Survey, employers are budgeting for an average 3.8% salary increase in 2024. Last year, employers expected the same increase for 2023, though actual pay increases were 4%. However, Payscale anticipates actual raises for next year will stay at 3.8% as inflation cools and the labor market loosens. In fact, 22% of surveyed employers plan to lower their salary budget increase next year, up from 9% last year. READ MORE

Salary increase projections for 2024: What the numbers say

After record-high pay raises in 2023, today’s tight talent market appears to be primed to continue driving employee compensation even higher next year—a reality that puts added pressure on HR and compensation professionals to get their salary budgets right.

Payscale—a provider of compensation data, software and services—reports that its eighth annual Salary Budget Survey found pay increases in 2024 are predicted to be 3.8% on average in the U.S., instead of the 3% that has been the standard for decades. And it projects higher increases in some states, industries and other countries. READ MORE

CVS ties customer experience to compensation

CVS Health is tying executive bonuses to meeting customer experience targets to ensure accountability for customer outcomes across the C-Suite.

Linking customer experience “to compensation gave us a seat at the table and made people start paying attention, like ‘Hey, if you don’t actually address this, you’re not going to get paid,’” said Srikant Narasimhan, vice president of enterprise customer experience at CVS Health, at a conference in Boston this week. READ MORE

Women who feel unhappy with their salaries are less likely than men to push for a pay rise

Women are still getting the short end of the stick at work when it comes to pay, but many still don't feel confident enough to ask for a pay rise, a new survey found. 

Ciphr, a HR systems company, surveyed 1,000 adults working full-time in the UK in June found that over a third of men had requested a pay rise from their employers, but only 26% of women felt confident doing the same. READ MORE