Short and Long-Term Incentives
Alliance Compensation designs cash and equity incentive plans that focus employees and executives on organizational, strategic, and financial goals that drive performance and improve your bottom line. With short and long-term incentives, there are many decision points to consider.
Companies seek assistance with Incentive Plan Design because:
- They want to focus employees on strategic objectives such as growth, profitability, client retention and vertical markets
- Cash and equity used as incentives can have a tremendous positive leverage on performance and productivity
- It’s important to know what options are available for short-term incentives (such as profit-sharing, gainsharing, etc.) and which to choose
- Although cash is important, incentives drive behaviors and it’s important to have the right mix
- Determining incentive levels and amounts can be difficult without data and analysis
Our experience with Incentive Plan Design includes:
- Establishing design philosophy and principles with stakeholders and ensuring alignment with the organization’s pay philosophy and strategies
- Selecting the right equity or cash vehicles and achieving the desired tax treatment
- Determining share usage and equity grant allocation for long-term incentives
- Managing budgets associated with annual STI and LTI allocations including eligibility recommendations
- Creating broad-based plans with distribution modeling
- Analyzing income and balance sheet impact
- Complying with regulatory requirements and recommendations from proxy advisory firms
- Change Management, Communication and Training plans and materials aligned to your needs
Getting the design of such plans right is critical to ensure they effectively drive desired performance and results.
Related Services and Links
We’ve written a few related Blogs: Creativity & Compensation, Increase Your Impact, When to Hire an Expert, Keys to a Successful Partnership with Finance. As you think about incentive plan design, food for thought.
Finally, here is a link to a summary article on setting targets for incentive plans: (coming soon).