Let’s Take those IRC Section 162(m) Lemons and Make Some Lemonade

The only sure thing is that change is inevitable. And that is exactly what happened in late 2017 to Internal Revenue Code Section 162(m) which limits tax deductions for certain compensation over $1,000,000 paid by publicly-held companies to “covered employees.” Up until late 2017, qualified performance-based compensation (a.k.a. bonus, stock options, long-term incentive, etc.) and commissions were not subject to the $1,000,000 tax deduction limit. In addition, most payments…

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Seize the Opportunity to Secure Top Talent

Over the past few months, the business community has experienced a flip in talent demand unlike anything it has ever seen before. In January, there were more jobs available than people to fill them. The scarcity of skilled, educated labor was especially pronounced. Talented people were in demand and could essentially name their price when making a career move. Then COVID happened. In a period of approximately 90 days,…

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How to Make Leadership a Cultural Value

Organizational leaders are trying to find their footing in what is shaping up to be a very different business environment than the one that existed at the start of 2020. The one word that most would probably use to describe the future is uncertainty. Consequently, chief executives must focus on the issues over which they have control, make assumptions about their customers, their suppliers, their finances, their employees and…

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Is Incentive Compensation Viable in an Uncertain Economy? (Part Two)

Last week I wrote about how the COVID economy has brought business leaders face to face with the flaws in their pay strategies. That experience has left many wondering what should happen going forward—and whether incentive plans should play a larger or a smaller role in their rewards approach. I asked the question: Should you even offer incentives in an economy as uncertain as this one? The answer was…

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Is Incentive Compensation Viable in an Uncertain Economy? (Part One)

Chances are, the COVID economy has brought you face to face with flaws in your pay strategy. When the lockdown hit, compensation became the enemy of cash flow and (perhaps) the cause of layoffs. Its “expensiveness” became a serious problem virtually overnight. Now you are most likely wondering what should happen going forward—and specifically whether incentive plans should play a larger or a smaller role in your rewards approach….

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Should you hire a Compensation consultant?

Okay, first things first. I suppose it might seem odd and even a bit self-serving for someone who is a principal in a compensation design firm to offer advice about engaging a pay consultant. However, given the hundreds of companies that have engaged VisionLink over the past 20 years, the reality is I have much “real life” experience with those who were ready for a pay consultant when they…

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What Should Incentive Compensation Reward in the New Economy?

In one form or another, most companies face an uncertain future right now. That’s a true statement any time, but the experience of the last three months has compounded the uncertainty for most leaders. What is clear is that the way of doing business going forward is not going to be the same as it was prior to COVID-19. And while most enterprise leaders are still shell-shocked from the…

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Equity Incentives at Publicly Traded vs. Private Equity Owned Companies: Is There a Difference?

Reublished with permission from Veritas Executive Compensation Consultants with special thanks to Michael Sirkin and James Reda Equity compensation for senior management of private equity owned companies is very different than that of publicly traded companies. While both types of companies share a common principle of rewarding management based on an increase in shareholder value, fundamental differences in the investors and their potential holding periods drive divergent equity compensation…

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What is the “Job” of Compensation in a Coronavirus Economy?

A few years ago, Clayton M. Christensen (the late Harvard Business School professor and author) introduced a concept he called the “Theory of Jobs to be Done.” This is how he explained it: “When we buy a product, we essentially ‘hire’ something to get a job done. If it does the job well, when we are confronted with the same job, we hire that same product again. And if…

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3 Secrets to Managing Compensation in a Covid-19 Economy

Chances are, you’re looking at your P&L these days and noticing just how large the compensation number is. In fact, it’s likely created a pit in your stomach—probably the size of a boulder. Bottom line, all logic says you need to lower than expense, no matter what. Well, not so fast. We suggest you take a deep breath before doing anything too drastic. In truth, treating pay strictly as…

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