Public Companies have increased responsibilities under current statutes, with increased scrutiny from shareholders, regulators and legislators. Stock plans are more expensive than ever and the methodology to determine cost (i.e., FAS123R) is complicated.

Owners of privately held businesses have their own challenges; for example, how to keep the senior executives motivated and loyal, often without providing an actual ownership interest in the company.

Not-for-Profit organizations, and their Board members, expose themselves to penalties imposed on them personally for "excessive" compensation paid to executives under IRC Section 4958. Click here to go to our Not-For-Profit section.

Services under Compensation Consulting:

• Executive Compensation

  Effective and appropriate executive compensation programs and plans are more important than ever. Base salary, bonus and incentive plans, stock plans and executive benefits must be effective, competitive, appropriate and defensible. Board remuneration plans require specialized knowledge and experience. The majority of our projects include executive compensation plan design.

• Salary Administration Plans

  Getting the salary guidelines right (grades, ranges, etc.) is critical and we assist clients by determining competitive practices, designing simple or comprehensive pay delivery systems, conducting surveys, preparing job descriptions, developing customized job evaluation systems, and developing enhanced performance management programs.

• Sales Incentive Compensation Plans

  Sales Incentive Compensation Plans are the most complicated kinds of plans to design, but also some of the most important. Every good seller needs the motivation provided by an effective sales compensation plan. Companies should review their sales incentive compensation plans periodically because these plans, perhaps more than any other type of plan, often do not keep pace with the company's and the sales staff's changing needs.

• Performance Management Programs

  Performance Management Programs include appraisals or evaluations that are essential to developing employee strengths, guide increase decisions, and support the discipline process.

• Custom Salary Surveys

  Custom Salary Surveys can be conducted when clients need competitive salary information that is not available except through a custom survey.

• Alternative Reward Programs

  Alternative Reward Programs use creative ways to encourage and reward staff performance. LCI has designed customized programs to meet specific needs.

Case Studies:

• Publicly Held High Growth Company

  Challenge:
  A publicly held high growth Dot.com company needed to establish it's own culture after being spun off from a parent company.

  Solution:
  We worked with the executive team and Board on virtually all aspects of direct compensation: salary grades and ranges, incentive plans, stock plans and Board remuneration.

• CEO of a NYSE Company

  Challenge:
  The CEO of a NYSE company served for several years for modest base salary and bonus. He wanted to set a good example plus ensure that the turnaround needed was well underway before he accepted an increase.

  Solution:
  In these days of executive compensation scandals and scrutiny, CEO compensation can be difficult to assess. In this case, when the time came, neither the Board nor the CEO knew what would be appropriate. LCI analyzed more than 30 proxies and several surveys and then designed a compensation program just for the CEO. It included adjustments to base salary, more appropriate incentive and stock opportunities, and special executive insurance plans covering both long term care and executive disability income replacement coverage.

• Key Executive Incentives

  Challenge:
  A private company needed key executive incentives—including long term incentives, to motivate productivity.

  Solution:
  Private companies face specific challenges when it comes to motivating and rewarding key executives. For one, stock-based plans are usually not possible. For another, the owner might not want to share private financial information with the plan participants. Lastly, picking the right performance measure can be difficult. We have worked with dozens of companies to find the right balance of performance, funding and vesting requirements.

• Not-for-Profit Organization

  Challenge:
  Board members can be held personally liable for their decisions on compensation.

  Solution:
  NFP organizations must comply with statutes applying only to them. Under the wrong set of circumstances, a Board member of a NFP might find himself personally liable if the IRS determines an executive is paid too much. "Paid too much" is not defined so often a market analysis is required. We have worked with several organizations to determine any Section 4958 exposure and ensure compliance.