Executive Compensation

We recognize every organization is unique in purpose and culture. As such, we believe it is important to tailor leading-edge compensation solutions to attract, motivate and retain the top talent of a company. Projects are tailored to the needs of the organization or its compensation committee.

In our experience, since 2002 there have been seven significant changes related to executive compensation: SOX, Announcement of Aggressive IRS Audits, Disney Court Rulings, FASB123R, 409A, SEC Disclosures and SAY ON PAY. Our resources in the Dallas office have decades of experience to apply to compensation program assessments and design in a complex and changing environment. The scope of our capabilities range from aligning programs with evolving competitive and business requirements to designing specialized programs and features to address critical business transactions (reorganization, joint ventures, spin-offs, mergers and acquisitions, and divestitures).

Services Include:

Executive Compensation Plan Assessments - A third-party assessment of market competitive executive compensation levels (base salary, annual incentive, long-term incentive, supplemental benefits and perquisites) reported to the board of directors and/or top management. Using published and custom data sources, we analyze the competitiveness of jobs and/or compensation components. These projects frequently address recommended compensation strategy, competitive pay levels, and compensation design parameters.

Annual Incentive Plan Design - The review or the design of a new incentive compensation plan. This includes executive, management, and all employee incentive plans ranging from gain sharing, objectives-based, balanced scorecard to economic value added plans. Deliverables typically include the definition of participants, the development of targeted payout levels, definition of performance metrics, a draft of the plan document, financial modeling and plan communication.

Sales Incentive Plans - The design and development of sales incentive compensation plans focusing on programs that increase the company’s profitability and the sales force’s productivity. The sales incentive plans are designed to align with a company’s business product, marketing and sales strategies.

Long-term Incentive Plan Design - The review or design of long-term incentive plans for both public and private companies. This includes equity plans such as stock options, restricted stock, stock appreciation rights, phantom stock, and cash-based, long-term plans such as performance units and performance shares. The deliverables typically include the definition of participants, targeted grant levels, vesting provisions, overhang recommendations, run rate recommendations, a draft of the plan document, a model of the long-term incentive grant levels with tax and accounting ramifications and plan communication.

Compensation Committee Advisor - Projects tailored to the needs of the compensation committee. Our support typically addresses concerns regarding the changing landscape of executive compensation and corporate governance through education, research, and experience.

Employment Agreements - The review of existing employee agreements and the creation of new employment agreements. This includes analysis surrounding the competitiveness of employment contract provisions and the drafting of employment contracts for legal counsel review.

Change-in-Control Plans - The review or design of compensation arrangements that fall under the complex IRC 280(G) rules. This includes competitive assessments of typical payout levels and contractual features, such as the definition of a triggering event and the design of single or dual triggers. In addition, it includes calculations of CIC payouts and the development of change-in-control and severance plan documents for legal counsel review.

Business Transaction Compensation Design - The development of compensation programs that align executive and employee interests with the objectives of a business transaction—e.g., merger, acquisition, divestiture, bankruptcy, joint venture. The scope of work may include program integration strategy and provisions for retention, incentives and severance.

Other Recognition Strategies - Other recognition strategies such as retention or project completion bonuses assist with retaining key employee talent. These projects include a process for selecting key employees, setting payout levels and timing, the development of the plan documentation, and plan communication.

Regulatory and Governance Support- The business consulting service in the field of executive compensation that helps maintain responsible, ethical and legal use of compensation and required reporting.

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NFP Securities, Inc. is not affiliated with Smith, Frank & Partners, LLC.

NFP Securities, Inc. does not offer legal or tax advice.

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