As the summer winds down, now is the perfect time to get a head start on year-end planning activities. The smartest compensation professionals are the ones who take proactive steps now so they can set their companies up for success in 2019. Waiting till the last minute is never a good idea, but it’s especially important in the current governance environment. Our executive compensation experts have compiled this checklist so you can bolster your executive compensation strategy and close out the year strong.
1. Review your salary structure.
Do you still have room to grow? Rising headcounts, new office locations, and ever-climbing pay levels all put a tremendous level of stress on salary structures. In this market, assessing the stability and flexibility of salary programs is quickly becoming an annual exercise.
2. Check your benchmarks.
Is your targeted position in the market still competitive? Can you attract and retain the talent you need with relative ease? Have new competitors popped up in the last year? Is it time to review how you define the competitive landscape?
3. Audit your equity incentive plans.
Take stock of your current and expected burn rate as the year winds down. Are you granting equity faster than you planned? Also, evaluate the holding power of vested and unvested equity awards for your key employees. Is it time to prepare for refresh grants?
4. Evaluate projected bonus payouts.
Keep a close eye on year-to-date and expected performance levels to begin modeling threshold, target and maximum payout levels across your organization. Also, start planning your communications strategies for multiple payout scenarios.
5. Gauge your merit budget.
Connect with hiring managers to get a jump start on identifying top performers and what it will take to keep your key employees engaged. Do you anticipate needing a larger or smaller budget relative to last year? What tradeoffs might you make?
6. Prepare for next year’s proxy disclosure
Start thinking about program changes you’re making this year and how you plan to report them in next year’s filing. Are you planning on updating your pay ratio disclosure?
Aon’s experienced compensation team is here to help if your team needs any extra support. Contact us to learn more https://humancapital.aon.com/about-us/contact-us.