Incentive Plan Decision Making
Incentive Plan Decision Making While Pay versus performance disclosures will headline most executive pay stories,
With a focus on performance over years rather than months, our long-term incentive plans position your organization for continued growth. We’ll partner with you on progressive, tailored solutions that reward long-term achievement and retain critical talent.
Whether stock-based or cash-based, a long-term incentive plan (LTIP) is an important part of your total compensation strategy. By rewarding top performance over several years, LTIP encourages retention of key staff members and aligns your team’s performance with your company’s long-term goals and strategy.
Attracting, retaining, and motivating talent is one of today’s most challenging issues for corporations. Many times, the central problem is developing an effective long-term incentive plan. Identifying how much and how to pay market competitive base salaries and bonuses is significantly less complicated than long-term incentive plans. Our long-term incentive plan expertise has helped hundreds of public, private, and not-for-profit organizations develop or refine long-term incentive plans that help the company maximize returns.
We have written three books on the topic: The Power of Restricted Stock, and companion books Stock Option Alternatives and Equity at Work, on which we served as technical writers. We have some of the most comprehensive knowledge and expertise in the industry on long-term incentive plan design.
Zayla’s long-term incentive advisory services help you create a company culture focused on long-term performance and key employee and executive retention. By understanding the goals that are key to your organization’s success, we develop plans that are both structured and flexible enough to reward true long-term performance through volatile economic changes.
Each plan has a “baked in” retention feature, encouraging staff to remain with your organization, accumulate rewards, and drive progress over a period of years rather than months. Our long-term incentive designs have been widely recognized to deliver the maximum bang for the buck and drive superior company performance.
Find out more about what makes Zayla different.
Zayla’s approach is rooted in deep listening and creating tailored solutions that help your organization achieve its goals. We don’t just look at what your peers or competitors are doing. We ask targeted questions about your company’s objectives, culture, compensation philosophy, and projected timeline for achieving important milestones.
Using two decades’ worth of experience in designing long-term incentive programs, we develop refined plans that maximize the value of your dollar. This ensures that the right investment vehicles are matched to your company’s team and goals, and your LTIP is more meaningful and motivating to your employees.
Long-term incentives are a great way to encourage understanding of your company’s long-term vision, mission, goals, and objectives. When designed thoughtfully, with measurable, achievable objectives, long-term incentive plans inspire excellence in performance, and encourage employees think beyond the short term, Long-term incentives can also retain employees over an expanded period. Finally, long-term incentives can help a private company or not-for-profit level the playing field with a public company peer that utilizes equity as a key component or total compensation.
Industry practices typically drive long-term incentive eligibility, but company culture, vision, goals, and objectives influence eligibility. Typically, executives who have managerial profit responsibility are eligible for LTI awards. This after will equate to a base salary level of $150,000.
We typically recommend reviewing your long-term incentive plans as frequently as you mark awards. For most companies these awards are made annually or every other year.
Long-term incentive plans are one of the most critical links between where a company is and where it wants to go. The following items are important influencers to a successful LTI plan:
Identifying reliable long-term incentive data by industry is one of the most challenging aspects of long-term incentive design. We rely on data in a variety of forms, including company proxy statements, annual reports/10Ks, Form 4 filings, published survey sources tailored to your industry, company investor presentations, and, most important, our significant experience in designing LTI plans over the past two decades for public, private, and nonprofit organizations.
Companies often need an outside perspective to determine leading edge marketplace practices. Additionally, boards frequently request an independent perspective to provide third-party objective advice when setting performance metrics and payout targets. And many companies lack the necessary staff with incentive plan design experience to develop leading edge programs.
Zayla™ is happy to help your company align your pay and governance structures and processes with your long-term goals.
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