Philosophy, Data and Structure; A Simple Guide to Executive Compensation


Executive compensation is at the top of your list of considerations when your company is recruiting. Hiring the most talented and aligned person for the job and retaining them—a simply stated goal that is far from simple. Compensation is a major piece of the recruiting puzzle. 

 

You want to position the role competitively vis a vis other companies to make sure you don’t lose your ideal candidate to someone else. To ensure a successful search, you’ll focus on three priorities:

  1. Having a clear compensation philosophy
  2. Evaluating all compensation data
  3. Proactively setting compensation boundaries and planning

 

Compensation Philosophy

Your compensation philosophy will be your north star, keeping you on track to your goal. There are numerous considerations—not everyone’s viewpoint is the same. Different businesses focus on a range of factors when establishing their philosophy. For example, does your organization believe that compensation drives performance or that performance must drive compensation? Does your organization place more value on best in class medical and retirement benefits? Those and many other theoretical positions will inform your compensation philosophy. 

 

There are many considerations as you establish a compensation philosophy. Questions to ponder are whether it’s important to: 

  • Align pay with your business’s annual and long-term performance goals
  • Ensure your compensation program is justifiable and equitable in a competitive market
  • Reward achievement, such as accomplishing specific objectives
  • Consider how you’ll balance base salary with short- and long-term incentives
  • Incorporate DEI values in your compensation scheme
  • Maintain internal equity across similar levels in different functions
  • Be a market leader, in the middle or follower with compensation for employees as compared to the competition

 

Once you come up with a compensation philosophy that will drive your recruitment and hiring, stay true to it.

 

Compensation Data

There are two basic ways to access current data about compensation within your field and in your part of the country. One is based on surveys and the other is real time data.

 

Surveys

Many companies will hire a consultant to conduct a compensation survey, looking at other companies in your industry that are commensurate in size and (if it’s important) operating in your geographic region. But those parameters can be misleading.

 

Consider whether you want to recruit from a different industry, believing that such an expanded search might bring in a skill set that will benefit you. You may be looking at companies that are larger and wealthier than yours, with the idea that the knowledge and experience of such a hire from one of those organizations will get your company to that next level. Most survey companies do not look at their targets through those lenses.

 

Surveys also cannot screen for businesses with a similar compensation philosophy. That information is rarely discoverable in public records for privately held companies, and we know that staying true to a philosophy is fundamental to a successful search.

 

A survey is definitely a piece of the picture, but probably the most notable issue with executive compensation comparison surveys is that there is a discrepancy between the actual market reality and the timing of the information they can gather. In some cases, by the time the survey is complete, the data could be antiquated for a variety of circumstance

 

Most executive compensation packages rely heavily on long-term incentive plans, but surveys mostly access information about base salary and bonuses. It is having a stake in the company that will drive executive wealth and spur the best candidates to join you, but except for publicly traded companies, information about equity is not disclosed. So how do you get accurate intel about what you’ll need to offer your recruits to get them to say yes?

 

Real-Time Data

The best way to get the inside scoop on executive compensation packages—including equity—is to work with someone who is close to the candidates - a search firm. Recruitment firms have a line on accurate, real-time information because they talk to candidates day in and day out, and though there are rules guiding what recruiters can ask, there is no rule about what a candidate can offer. It turns out, they tend to share this kind of information with recruiters.

 

If you want to have as much information as possible about what compensation looks like among the people you hope to recruit, combining survey data with the support of an executive recruitment firm should provide you a more accurate picture of the market.

 

Proactively Setting Compensation Boundaries and Planning

Once you have your compensation philosophy and the data you need to plan a winning compensation structure, be ready to make an offer. That means get pre-approval from your CEO, board, or whoever needs to sign off on compensation. And get it well in advance.

 

If your company uses a grading/leveling system to set compensation for each position, and the grade-range is out of line with what you know you’ll need in your recruitment, either adjust the candidate profile or use data to justify re-grading the position.

 

If your company is not yet able to offer equity, there are other ways to mirror that upside without an equity plan. If your targeted bonus range is lower than the market, perhaps adjusting the salary range can be the solution. to let you compete with bigger companies vying for the same candidate.

 

One of the most frustrating outcomes is to go through the entire recruitment process identifying the ideal candidate for the job—but there’s a gap in their compensation needs and what you have approved. If at this point you attempt to get approval to increase the compensation ranges, you’ll lose time, and all too often, you’ll lose the candidate as well. Once you have the candidate you want, you need to make a competitive offer fast. Good planning, understanding what you might be up against, and proactively addressing the issues before you conduct a search – make extending fast offer possible.

 

Pre-approvals are also important to consider based on the timing of conducting searches. If you are recruiting towards the end of the fiscal year, your best candidates may be a few weeks or months away from a sizeable annual bonus. You can either hire them with a delayed start date, having them sign a contract that begins after their bonus is earned and delivered, or, if time is of the essence, you can buy out the bonus they’ll be giving up with a commensurate sign-on bonus. Once you know who you want, use your compensation budget and flexibility to seal the deal.

 

Executive Compensation Can Move the Needle on Recruiting

The talent you are looking for is out there. Even if they are not knocking at your door, they are reachable—and hirable. 

 

According to a survey conducted by Experteer, 97% of sitting C-suite executives are very open to being head-hunted for relevant vacancies even if they are not actively looking. A discreet approach (the expertise of recruitment firms) often yields terrific candidates, but having something special to offer is going to be key. That includes a tempting position in an exciting, change-making, or up-and-coming company and a competitive executive compensation package to get it across the goal line.

                             

Understanding your compensation philosophy and sticking to it, leveraging real time market data to see the whole picture, and being ready and flexible with proactive planning, will put you and your organization in a better position to hire a quality leader who can take your business to the next level.

New Opportunity: Corporate Development Manager

By Christine Kennedy • March 12, 2025
Corporate Development Manager About the Company Impel is a family of companies that offer comprehensive flow management solutions in partnership with each other and the best manufacturers in the world. Each of Impels branches represent individual brand cultures and span the West Coast. Impel serves customers in water, wastewater, agriculture, industrial, manufacturing, energy and mining. Impel was founded in 2021 with a vision to build a “one-stop shop” to serve municipal and industrial fluid management needs by acquiring complementary capabilities in contiguous geographies. The platform launched with the first acquisition of PumpTech , a premier distributor of high-quality pumping products and systems serving the Pacific Northwest. Subsequent acquisitions have grown Impel to over ten fluid management companies throughout the US. Impel is backed by Pike Street Capital , a private equity firm based in Seattle, WA. Recently, Pike Street successfully raised capital to fund additional acquisitions. Impel is actively pursuing growth opportunities and remains focused on acquiring and partnering with family-owned and operated companies in the sector. About the Role This is a key position managing the acquisition process within Impel. You will participate in all aspects of the investment process including industry/market research, deal origination, strategy and execution, and relationship building with acquisition target owners, executives, investment bankers and other intermediaries. This is a great role if you’re looking to own the deal process and progress your skillset as a deal professional. This role will give you deep insight into the entire acquisition process while closing multiple deals a year. We are a fairly lean team and believe in cross functional work so come with a growth mindset and you will develop a skillset across each business function; Our team believes in developing our team members. Primary Responsibilities Perform company analysis, including initial screenings, financial modeling and valuation, due diligence, consultation with external advisors, and preparation of materials for internal investment meetings. Responsible for M&A project management processes to include, but not limited to, valuations, letters of intent, due diligence analysis, financial planning, and business case development. Analysis of risks and opportunities of M&A activities, translate this into fact-based and well-reasoned insights on the valuation and structural impact of various acquisitions. Drive market research and strategic fit analysis. Conduct research on prospective sector opportunities and market trends and develop and present data-based opinions to inform decision-making and price transactions. Participate on deal teams to help structure and execute transactions, including coordinating the deal process and legal and transactional documentation. Special projects working directly with C suite, functional leads, and regional vice presidents. Qualifications 2-6 years experience in private equity, consulting, financial DD/QoE, investment banking, accounting, or corporate M&A Exposure to other diligence areas including commercial, operational, market sizing, risk analysis, customer and supplier, agreement review, etc. Excel and PowerPoint expertise Value oriented Strong communication skills Commitment to high professional standards Credentials: CPA preferred Interested in Learning More? 180one is a retained search firm and has been engaged by Impel to manage this search. If interested in learning more about the opportunity, please contact Tom Haley /503.334.1350/ tom@180one.com

The 4 Letter Word That Every Private Company Should Know About – LTIP

By Greg Togni • March 10, 2025
Long Term Incentive Plans (LTIPs) and Why to Implement Executive compensation is a nuanced and multifaceted subject that involves a delicate balance between rewarding top talent and aligning their interests with the long-term success of the organization. Typically, executive pay packages consist of three primary components: base salary, annual bonuses, and long-term incentive plans (LTIPs). While base salary and annual bonuses have historically been the most visible and commonly discussed elements of executive compensation, LTIPs are increasingly being recognized as the third and arguably most important leg of the stool. LTIPs serve as a tool for aligning the goals of executives with those of the company over the long term, offering rewards that are tied to the sustained growth and profitability of the organization. As businesses evolve and face growing challenges, LTIPs have become a central component in shaping how executives are compensated, ensuring they remain focused on creating long-term shareholder value. Over the past 75 years, LTIPs have been a common feature in public companies, where stock options, performance shares, and other equity-based incentives align executives with shareholder interests. It hasn’t been until the past couple of decades that private companies have implemented LTIPs to align executives' interests with the long-term success of the company, but also almost out of necessity to compete for the same talent who might already possess an LTIP as part of their compensation. What Are Long-Term Incentive Plans (LTIPs)? Long-Term Incentive Plans (LTIPs) are compensation structures designed to reward executives for achieving long-term business goals. Unlike annual bonuses, which are typically tied to short-term financial metrics, LTIPs are structured to reward performance over a longer time horizon—usually three to five years or more. The primary purpose of LTIPs is to ensure that executives are motivated to focus on sustainable growth, value creation, and the long-term health of the company. The Factors Driving the Adoption of LTIPs in Private Companies According to a survey by WorldatWork, approximately 63% of private companies are using LTIPs as a means of rewarding executives and aligning their interests with the company’s long-term success. Several factors have contributed to the rise in popularity of LTIPs in private companies, ranging from the quest for competitive advantage to changes in organizational dynamics and evolving employee expectations. But the following reasons might shed additional insight: Companies with LTIPs Have 30% Higher Revenue Growth: Research by the National Center for Employee Ownership (NCEO) found that companies that implement equity-based LTIPs experience 30% higher revenue growth compared to those that do not. The statistic underscores the positive impact of LTIPs on a company’s overall performance, as they drive executive focus on achieving goals that lead to sustained revenue growth, innovation, and market expansion. 91% of Executives in Private Companies Cite LTIPs as Key to Retention: A survey by Korn Ferry found that 91% of executives in privately held companies consider LTIPs an essential factor in their decision to stay with the company. The statistics demonstrate the significant role LTIPs play in retaining key talent, ensuring that executives are motivated to stay with the company over the long term. By offering equity-based compensation, companies can reduce turnover and keep their leadership team focused on long-term objectives. Companies With LTIPs Are 50% More Likely to Meet Exit Targets: According to a report by Bain & Company, private companies that implement LTIPs are 50% more likely to meet or exceed their exit targets during mergers, acquisitions, or initial public offerings (IPOs). By aligning executives' interests with long-term value creation, LTIPs motivate leadership to work toward achieving the performance metrics that will maximize the company’s value at the time of sale or public offering. Transitioning Ownership and Succession Planning: For family-owned businesses or privately held companies with a significant ownership stake held by a small group, succession planning is another critical factor in the decision to adopt LTIPs. As the company grows and the leadership team evolves, there may be a need to transition ownership to new management. LTIPs can help retain key executives during this period of change, providing financial incentives that keep the team focused on the company’s long-term growth even during periods of uncertainty. As businesses strive to remain competitive and evolve in an increasingly dynamic marketplace, the adoption of LTIPs has evolved as a key driver for optimizing performance. No longer limited to public companies; private companies have increasingly recognized the benefit and need for these compensation structures. Perhaps adding these 4 simple letters (L-T-I-P) to a company’s compensation program could be the difference maker that they’ve been looking for.

New Opportunity: Assistant General Counsel

By Greg Togni • March 3, 2025
Assistant General Counsel With roots going back to the 1960’s, Forest City Trading Group (FCTG), may have started as a small lumber yard run by two immigrant brothers, but has since grown into North America’s largest wholesale lumber product distributor. FCTG facilitates the distribution of products across 6 continents through our network of 12 operating companies and over 800 employees. The company’s impact is far-reaching, especially when considering that one in every ten houses today is built using products sourced and sold by our operating companies. As proponents of forest sustainability, FCTG actively supports suppliers who use sustainable forest management practices that promote forest sustainability and result in long-term environmental, social, and economic benefits. Due to significant growth over the last decade, and expecting strong growth in years to come, FCTG is adding an Assistant General Counsel to their legal team to support growth and help scale the business. Position Overview Forest City Trading Group is seeking a highly motivated and skilled Assistant General Counsel to report directly to, and support, the General Counsel and assist in managing the company's legal operations. The ideal candidate will have strong legal expertise, excellent communication skills, and the ability to collaborate effectively across different business units. This position offers an exciting opportunity to be a part of a dynamic team while contributing to the growth and success of the company. Key Responsibilities Provide legal support to the General Counsel on a variety of corporate, commercial, regulatory, and operational matters. Assist in the company's legal department operations, including document management, contract review and negotiation, legal strategy, and corporate governance. Draft, review, and negotiate contracts, agreements, and other legal documents to ensure compliance with applicable laws and regulations. Assist with the management of corporate compliance and risk management programs, including conducting legal risk assessments and providing recommendations for mitigation. Collaborate with cross-functional teams (e.g., finance, IT, human resources, marketing, trading operations) to provide legal guidance on operational and business issues. Advise on employment law matters, including policies, employee relations, and compliance with federal and state employment laws. Handle legal research and due diligence for mergers, acquisitions, and other corporate transactions as needed. Manage outside counsel and vendors, ensuring legal matters are handled efficiently and cost-effectively. Assist with litigation and dispute resolution matters, including managing internal investigations, handling settlement negotiations, and overseeing litigation strategy. Stay updated on legal developments and regulatory changes that may impact the company’s operations and provide proactive legal solutions. Qualifications and Skills Juris Doctor (JD) degree from an accredited law school. Licensed to practice law in Oregon. Minimum of 5 years of legal experience, with preference for some experience within a corporate or in-house legal environment. Experience in corporate governance, commercial contracts, employment law, and regulatory compliance. Strong analytical skills with the ability to identify and solve complex legal problems. Excellent written and verbal communication skills. Ability to work independently, manage multiple priorities, and maintain a high level of professionalism under pressure. Strong interpersonal skills and the ability to build effective relationships with internal stakeholders at all levels of the organization. Ability to handle confidential and sensitive information with discretion. Preferred Experiences Experience supporting operational functions, such as HR, marketing, and compliance, in a corporate setting. Previous experience managing outside counsel and coordinating legal projects. Experience with construction and material supply contracts. Interested in Learning More? 180one is a retained search firm and has been engaged by Forest City Trading Group to manage this search. If interested in learning more about the opportunity, please contact Lisa Heffernan/ 971.256.3076/ lisa@180one.com
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