On Point Survey: Clearly Communicating Executive Pay

Boards—and compensation committees in particular—thoughtfully develop executive pay programs with attraction, retention, and motivation in mind. But is there a commensurate amount of investment and effort dedicated to communicating the details and the potential value of those programs to the executive team? If not, boards may be missing an opportunity to engage with their leaders and boost the effectiveness of executive pay.

Pearl Meyer recently conducted a survey to learn: 

• How boards and their management teams are educating participants about their executive compensation opportunities;
• If boards and their management teams believe their executives understand how their compensation is structured and delivered; and 
• If boards and their management teams believe executives appreciate the value of their compensation and how it compares to their internal colleagues and external peers.

The bottom line is that this data provides boards and management teams with an opening to align their perceptions and revisit their communication strategies. It will be time well spent if executives better understand and appreciate the overall value of their compensation opportunities.