Paying for Performance: A Guide to Compensation Management

An effective executive compensation plan isn't just the happy medium between what a company can afford and what employees will settle for. A well-designed plan is a powerful tool that fosters excellence and builds competitive advantage. Unfortunately, increased scrutiny from shareholders and the public, as well as a battery of new laws and regulations concerning executive compensation, have made an already difficult task seem insurmountable. In this climate, executives, human resources personnel, and shareholders must work together to develop compensation plans that balance business issues such as fiscal responsibility, competitive advantage, and human resources concerns with a complex body of law.

Paying for Performance is a hands-on guide to designing and implementing successful executive compensation plans. It provides proven compensation models and a set of powerful tools to help you solve existing problems and avoid future ones. This guide covers a broad range of crucial compensation issues, from performance management to taxes, variable pay programs to peer reviews, equity plans to retirement planning. You'll also find detailed analyses of the various approaches taken in companies throughout North America and practical guidance on how to adapt the best ones for your company.

The compensation models described in Paying for Performance are based on two wide-scale research projects conducted by KPMG Peat Marwick in conjunction with the American Compensation Association. Over the course of several years, team members, headed by Peter Chingos, investigated policies among both high- and low-performers across most business sectors. The case studies presented throughout this book reflect the best (and occasionally the worst) compensation practices now employed at many of America's most successful companies.

Paying for Performance follows a consistent model/case study format. This format makes for easy reference, allows you to witness the techniques described in action, and enables you to compare and contrast your company's policies with those practiced at leading organizations.

Paying for Performance is a valuable resource for CFOs, COOs, senior HR managers, board members, and all those involved with the design and implementation of executive compensation programs.

A complete, practical guide to designing and implementing effective executive compensation plans

A compensation package can be more than just the bait you use to attract and hold on to talented executives. The right kind of plan can give your company a powerful strategic advantage. In Paying for Performance, one of the nation's leading authorities on compensation management gives you the tools and techniques you need to design and implement a highly effective compensation program that will sharpen your company's competitive edge for years to come. The book also shows you how to navigate the rocky shoals of shareholder expectations, government regulation, and a host of business and human resources issues. Paying for Performance:

• Describes best practices used at America's top-performing companies
• Uses case studies drawn from an exhaustive nationwide study
• Offers proven tools for solving current and future problems
• Covers everything from base pay and reward systems to accounting issues
• Follows a model/case study format that makes for easy reference.

PETER T. CHINGOS is National Director of KPMG Peat Marwick's Performance and Compensation Management consulting practice.