About half (51 percent) of U.S. companies plan to hold annual say-on-pay votes, while about four in 10 (39 percent) expect to hold votes every three years, according to a recent survey by Towers Watson.
One in 10 (10 percent) comanies plan to hold a shareholder vote every two years.
“Clearly, there’s no single right answer to the question of how frequently these votes should be conducted that will work for every company,” says James Kroll, a senior consultant at Towers Watson. “Each company seems to be assessing its own circumstances and needs, taking into account its specific shareholder composition and the degree of potential shareholder concern about the company’s executive-pay programs.”
As we mention in our latest HREOnline™ story, Remuneration Rumination, the Dodd-Frank Wall Street Reform and Consumer Protection Act requires companies to hold say-on-pay votes every three years.
While experts quoted in that story wonder whether a mandatory say-on-pay system will help improve the size and structure of pay packages, they also recommend compensation structures that contain sufficient equity in the form of stock and options to align the executives’ interest with shareholders.
Executive stock awards should have long vesting periods, they say, and pay plans should reward executives for outperforming peer groups at other companies.
As for say-on-pay votes, nearly half (49 percent) of companies are unsure what vote tally will be considered a successful outcome by their boards, according to the Towers Watson survey.
See what you may have missed:
* Checking in With the Next Generation
Peter Cappelli ‘s latest Talent Management column looks at Wharton’s annual mid-term exam, which explores students’ view of their last job and the way they were managed. In most cases, management was lacking. Feedback was limited or nonexistent, and bonuses — instead of resulting in engagement and motivation — often prompted these high-potential candidates to quit or slack off.
* Time to Re-Engage
Top businesses for HR practices — according to an exclusive recalibration of Fortune’s “Most Admired Companies” list — are taking employee engagement very seriously in this economy. (A PDF of the Top 50 Companies is here.)
* E-Learning Still Trending Up
Companies continue to adopt technology-based training for employees as expenditures in training and development decreased overall last year. At the same time, the expenditure per employee actually remained stable, because the workforce was smaller.
* Pinpointing Leadership Qualities
Social networking is changing the way HR leaders think of legal risks and recruiting opportunities, writes Susan R. Meisinger in her latest HR Leadership column. It also should make them think about the way they select high-potential candidates for leadership-development programs.
* Talking up Flexibility
Work/life balance is drawing more attention from the White House and other policymakers as research continues to show that the issue has an impact on the decisions of working families. A recent conference brought together representatives from the administration, military, academia and corporate America to attempt to drive the discussion onward.
Last week’s most popular articles on HREOnline™ — See what you may have missed:
* Bill Kutik’s latest column: When Will They Ever Learn?
The learning management vendors, now solidly selling talent management, are bubbling these days. Cornerstone OnDemand has announced its intention to go public; Plateau has shucked off its heritage of selling installed systems in favor of SaaS; and Saba (already public) is pioneering collaboration tools for corporate use.
* Chilling Worker Speech on Facebook
The NLRB’s case against an ambulance company that fired an employee for a posting on Facebook really boils down to traditional labor law, experts say. Can a worker be fired for bad-mouthing a supervisor who denied them access to union representation? The decision will have implications for company policies on social-media use.
* A New Era for HR Perks?
Increased public scrutiny has probably contributed to the leveling off of executive perquisites, but a recent analysis shows that two-thirds of HR executives receive some form of perk. The larger the company, the more likely HR leaders would receive perks, although there were industry differences.
* HR’s Role in ERISA Regulation
New regulations have been handed down from the U.S. Department of Labor related to fiduciary requirements for fee disclosures in retirement accounts, including 401(k)s. HR can play a key role in compliance by effectively getting the new information out to employees, experts say.
* Ch-Ch-Ch-Changes in Congress
As the United States braces itself for a Republican-led House of Representatives after the sweeping GOP victories in the midterm elections, experts weigh in on what it all means for HR.
It’s not surprising that the WorldatWork Society of Certified Professionals has developed a new certification for executive compensation, available in October.
As the Washington-based agency notes in its recent announcement of the move, “In the wake of the economic crisis and continued scrutiny of executive compensation by media and shareholders … executive compensation practitioners are being called upon to design and manage programs that attract, motivate and retain dynamic executives and leaders who have the ability to drive positive business results.”
The new certification — designed for executive rewards practitioners, consultants and human resource professionals involved in the design and administration of executive compensation — would help to “ensure that companies are working with knowledgeable and competent executive rewards practitioners,” the release states.
Don Linner, executive compensation practice leader for the Washington-based total-rewards company, says the alternative — poor executive comp practices — “can lead to intense public scrutiny, organizational instability and turnover.”
It’s about time this expertise became legitimate, test-worthy and trustworthy, especially in this environment. Had something like this been in place several years ago, it might have spared a few organizations I can think of some unwanted publicity.