Executive compensation plans typically are tied to corporate strategy, often rewarding executives for hitting financial targets over three-year cycles. But with technology disrupting traditional business models and societal forces undercutting shareholder primacy, executives find themselves tied to an incentive structure that supports incremental change when they really need to be fundamentally reshaping the business. The authors suggest a new framework for executive compensation, designed around six key approaches, focused on: 1 mission, rather than strategy; 2 stakeholders, rather than shareholders; 3 outcomes, rather than milestones; 4 financial and nonfinancial goals, rather than purely financial goals; 5 end-to-end cycles, rather than overlapping; and 6 goals that improve at a set amount over a prior cycle and relative to peer performance, rather than budgeted performance. The nature of change in business today differs from the past in both magnitude and pace: Technology is disrupting fundamental business models, forcing transformation across whole industries. At the same time, societal forces and new business priorities are undercutting shareholder primacy while strengthening other stakeholder interests. Strategic stability has fallen from its pedestal in favor of strategic agility.
The Literature Review on Compensation System Design
How Is Executive Compensation Different From Mine?
The alignment between compensation and company performance, making important compensation award decisions, and the retention of Senior Executives are essential responsibilities of Compensation Committees Board of Directors in public and many private real estate companies. Compensation governance is increasingly comprehensive, involving: motivating and retaining employees; setting high achievement standards; providing consistent financial opportunity annually and long-term; alignment with the goals of the company and its shareholders; and allowing for flexibility and discretion in a rapidly changing business and regulatory environment. Learn More. We create customer based process and performance improvement solutions that enhance resident satisfaction, improve tenant loyalty and increase retention. Providing market context, plan review and design for the Real Estate Industry, that enables you to align compensation with performance and exceed your Stakeholders' expectations. We provide state-of-the-art thinking and best practice resources, offering useful tools for meeting the opportunities and challenges facing today's Real Estate Industry.
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