1. JULY-­‐DECEMBER
2011
MUSINGS ON COMPENSATION AND PERFORMANCE
LOCATION: COMPENSATION
CAFE DATE: DECEMBER
20,
2011
Some%mes
the
Road
Less
Traveled
leads
to
a
Band
of
Flying
Monkeys
We
all
get
bored.
Most
of
us
fill
that
boredom
by
exploring
something
new.
OLen
this
leads
to
an
exciNng
new
restaurant,
but
someNmes
it
means
a
terrible
meal.
SomeNmes
this
means
meeNng
new
friends,
other
Nmes
it
means
gePng
stuck
at
a
colleague's
holiday
party
listening
to
stories
about
office
poliNcs
and
sick
children.
In
my
experience,
very
few
compensaNon
professionals
are
also
extreme
sports
fanaNcs.
I
seldom
speak
to
someone
in
our
industry
who
has
recently
snowboarded
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LOCATION: COMPENSATION
CAFE DATE: DECEMBER
19,
2011
Prepare
for
Compensa%on
Mee%ngs
Like
an
NFL
Broadcaster
Like
many
of
you,
I
have
football
games
playing
on
my
TV
during
most
autumn
Sunday
aLernoons.
Also,
like
most
of
you,
I
pay
a
lot
aUenNon
to
the
big
plays,
but
liUle
aUenNon
to
the
broadcast
itself.
This
past
Sunday,
for
perhaps
the
first
Nme
ever,
I
focused
on
the
incredible
preparedness
of
the
professionals
producing
the
television
events.
It
got
me
to
thinking.
What
if
compensaNon
professionals
prepared
themselves
in
the
same
way?
Our
meeNngs
with
ExecuNve
Management
and
more
MORE...
LOCATION: COMPENSATION
CAFE DATE: NOVEMBER
29,
2011
How
to
Explain
Stock
Op%ons
to
a
Dog
Stock
opNons
are
one
of
the
most
used
and
least
understood
tools
in
the
compensaNon
toolbox.
Recently,
a
new
opNonee
asked
if
I
could
explain
stock
opNons
in
a
manner
that
even
his
dog
could
understand.
I
have
included
my
answer
below.
"Come here Rover, I have got something to explain to you. Stock Options ....STOP scratching yourself and listen....Stock
Options are an offer from the company that allows you to buy company stock at a later date. The cool thing...STOP If
MORE...
LOCATION: COMPENSATION
CAFE DATE: NOVEMBER
10,
2011
Goldilocks
and
the
3
Broad-­‐based
Stock
Plans
There
once
was
a
dedicated
professional
who
was
tasked
with
creaNng
a
company-­‐
wide
stock
plan
at
her
new
company.
HenrieUa
Rachel
Goldilocks
(let’s
just
call
her
“HR
Goldilocks”)
had
years
of
Human
Resources
and
CompensaNon
experience,
but
liUle
interacNon
with
broad-­‐based
equity
compensaNon.
She
searched
the
web
and
spoke
to
some
experts
on
the
topic.
Each
expert
had
a
ton
of
informaNon,
but
many
tended
to
discuss
general
trends
rather
than
HR
Goldilocks’
very
specific
needs.
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2. MUSINGS ON COMPENSATION AND PERFORMANCE
LOCATION: COMPENSATION
CAFE DATE: NOVEMBER
2,
2011
Equity
Compensa%on
Data
for
Start-­‐ups
and
Other
Private
Companies
During
the
month
of
November
I’m
going
to
focus
on
my
equity
compensaNon
roots.
With
both
the
IPO
and
M&A
markets
once
again
starNng
to
gain
aUenNon,
we
can
start
by
discussing
a
recent
survey
on
equity
compensaNon
at
private
companies.
The
NaNonal
Center
for
Employee
Ownership,
(www.nceo.org)
just
released
their
2011
Private
Company
Equity
CompensaNon
Survey.
This
survey
is
unique
because
it
focuses
exclusively
on
data
from
more
than
200
privately
held
companies.
Given
the
MORE...
LOCATION: COMPENSATION
CAFE DATE: OCTOBER
18,
2011
Compensa%on
In
the
Eye
of
the
Tornado
In
a
world
of
swirling
regulaNons,
opposing
forces
of
needs
versus
budgets
and
increasingly
pressing
deadlines,
it
is
far
too
common
to
get
caught
up
in
the
tornado
that
is
our
everyday
work.
Generally,
when
a
tornado
comes
the
best
plan
is
to
get
out
of
its
way.
When
that
is
not
possible
and
the
tornado
takes
hold,
our
survival
insNncts
immediately
look
for
a
way
out.
I
am
here
to
propose
a
beUer
plan.
Think
about
it.
What
happens
as
you
move
towards
the
edges
of
a
tornado?
MORE...
LOCATION: COMPENSATION
CAFE DATE: OCTOBER
4,
2011
Compensa%on:
The
Word
May
Not
Mean
What
You
Think
it
Means
What
does
“compensaNon”
mean?
Those
of
us
who
work
as
compensaNon
professionals
consider
it
a
posiNve,
professional
word
that
speaks
to
people
gePng
paid
for
services,
effort
or
performance.
Like
many
words,
compensaNon
actually
means
something
else
enNrely.From
the
Collins
World
English
DicNonary
1. the act or process of making amends for something
MORE...
LOCATION: COMPENSATION
CAFE DATE: SEPTEMBER
19,
2011
Either
Put
Me
in
Charge
or
Let
Me
Be
a
Lackey.
I'm
Fine
with
Either,
But
I
Can't
Do
Both.
A
friend
recently
updated
their
status
with
the
Ntle
to
this
arNcle.
Ironically,
I
saw
it
just
as
I
got
off
a
call
with
a
client
who
was
explaining
that
somehow
she
was
expected
to
serve
as
both
the
strategic
visionary
and
tacNcal
processor
for
her
company’s
mulN-­‐naNonal
LTIP
programs.
The
simple
request
in
my
friends
status
update
seemed
reasonable,
well
thought-­‐out
and
familiar.
As
we
traverse
the
crags
of
MORE...

3. MUSINGS ON COMPENSATION AND PERFORMANCE
LOCATION: COMPENSATION
CAFE DATE: SEPTEMBER
12,2011
How
Much
to
Keep
Your
Mouth
Shut?
How
does
compensaNon
interact
with
reputaNon?
Let
me
count
the
millions
of
ways.
The
calculus
of
reputaNonal
damage
can
be
more
intertwined
than
we
account
for
in
our
current
severance
agreements.
Recent
news
arNcles
have
discussed
comments
by
Yahoo’s
deparNng
CEO,
Carol
Bartz.
Famously,
or
infamously,
she
declared
in
a
media
interview
that
she
disagreed
with
her
terminaNon
and
felt
that
perhaps
the
company
had
not
been
completely
MORE...
LOCATION: COMPENSATION
CAFE DATE: AUGUST
31,
2011
Compensa%on
Crack
the
Whip!
Managing
the
Velocity
of
Change
I
am
sure
that
when
some
people
saw
this
Ntle,
their
first
thought
was
of
the
mighty
compensaNon
professional
standing
above
the
fray,
bullwhip
in
hand,
direcNng
execuNves
and
employees
to
do
what
is
required
to
ensure
their
company
success.
But
let’s
be
realisNc,
that’s
probably
not
going
to
happen.
More
importantly,
in
this
case
I
am
talking
about
an
enNrely
different
type
of
“crack
the
whip.”
Changes
to
corporate
strategy,
compensaNon
rules,
market
forces
and
other
influences
mean
MORE...
LOCATION: COMPENSATION
CAFE DATE: AUGUST
29,
2011
Say
on
Pay
–
The
Excep%on
Proves
the
Rule?
Say
on
Pay
is
currently
the
largest
driver
of
change
in
the
world
of
execuNve
compensaNon.
This
provision
of
the
Dodd-­‐Frank
Act
was
the
talk
of
the
media
and
consulNng
firms
during
the
2011
proxy
season.
And
it
will
certainly
be
a
major
force
as
we
prepare
for
the
2012
proxy
season.
This
focus
is
interesNng
since
shareholders
overwhelmingly
supported
execuNve
say
on
pay
proposals
this
past
year.
The
majority
of
pay
programs
received
an
average
of
more
than
90%
support,
and
less
MORE...
LOCATION: COMPENSATION
CAFE DATE: AUGUST
23,
2011
Cheater
Cheater
Integrity
Eater:
Teachers
and
Pay
for
Performance
Some
people
say
the
recent
cheaNng
scandal
in
Atlanta
area
schools
gives
rise
to
the
ugly
side
of
performance-­‐based
pay.
CriNcs
loudly
shout
that
teachers
cheaNng
on
standardized
test
scores
only
to
earn
beUer
compensaNon,
proves
that
pay
for
performance
doesn’t
work.
Equally
loud
criNcs
on
the
other
side
of
the
argument
shout
that
pay
without
performance
has
been
proven,
over
many
years,
to
work
when
used
properly.
Both
sides
believe
that
our
priority
should
be
educaNng
our
MORE...

4. MUSINGS ON COMPENSATION AND PERFORMANCE
LOCATION: COMPENSATION
CAFE DATE: AUGUST
8,
2011
How
is
Pay
for
Performance
like
Driving
a
Fire
Truck?
San
Francisco
has
lots
of
tall
buildings,
so
we
need
those
cool
ladder
fire
trucks
that
you
see
in
the
cartoons.
There
is
a
firefighter
in
the
front
seat
and
another
with
a
steering
wheel
in
the
back.
As
one
drove
by
on
an
emergency
call
my
nephew
asked
me
who
was
in
charge
steering
the
truck.
It
took
me
a
second,
but
my
answer
was,
“both.”
As
so
many
things
tend
to
do,
this
immediately
popped
into
my
mind
when
discussing
MORE...
LOCATION: COMPENSATION
CAFE DATE: JULY
27,
2011
Defining
Pay
for
a
Compensa%on
Unicorn
At
a
recent
client
engagement,
the
HR
department
described
a
specific
posiNon
they
were
having
a
hard
Nme
trying
to
fill.
The
posiNon
was
incredibly
specific
and
required
knowledge
and
a
skill
set
that
was
nearly
impossible
to
conceive.
They
told
me
that
they
had
been
trying
to
fill
the
posiNon
for
almost
two
years.
During
that
period,
the
department
in
need
had
created
“beUer
and
more
specific
definiNons.”
As
I
probed
deeper
it
became
clear
that
this
posiNon
was
more
than
difficult
to
fill,
it
was
MORE...
LOCATION: COMPENSATION
CAFE DATE: JULY
19,
2011
How
Much
Money
to
do
a
Job
You
Don’t
Want?
Companies
are
trudging
their
way
through
this
slow
and
oLen
painful
economic
recovery.
ReorganizaNon
has
become
a
mantra
of
survival,
but
where
do
your
employees
and
their
compensaNon
fall
into
the
mix?
Recently
both
friends
and
clients
have
been
telling
me
about
their
troubles
at
work.
Many
aren’t
really
complaining
about
their
compensaNon,
they
are
griping
about
the
job
they
are
doing
for
the
pay.
MORE...
LOCATION: COMPENSATION
CAFE DATE: JULY
6,
2011
Equity
Compensa%on:
Gi,
Reward
or
Lease?
Skype
as
been
vilified
for
buying
back
shares
from
vested
and
exercised
stock
opNons
(see
details
here
and
here).
The
acquisiNon
of
Skype
by
MicrosoL
increased
the
stock
value
enormously.
Ex-­‐employees
complained
that
the
company
required
the
return
of
shares
exercised,
while
only
providing
the
original
exercise
cost
as
repayment.
In
the
paradigm
established
during
Equity
CompensaNon’s
Golden
Decade
(the
late-­‐1990’s),
this
type
of
provision
was
nearly
unheard
of.
In
the
more
than
10
years
MORE...