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 compensation committee.

Since 2002, there have been, in our experience, 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 Houston office has the ability to refer to a wide range of experiences while consulting on complex situations ranging from high-growth, bankruptcy, shareholder and employee litigation, IRS audits, spin-offs, mergers and acquisitions and divestitures.

Services Include:

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

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. These projects typically have a deliverable that covers recommended compensation philosophies, competitive pay levels, and compensation design parameters.

Long-term Incentive Plan Design - The review or design of a new long-term incentive plan. This includes equity plans such as stock options, restricted stock or 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.

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, goal sharing, balanced scorecard, economic value added plans, and sales compensation. 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.

Customized Salary Surveys - The design of a customized salary survey and the analysis of data from participants. The deliverable is typically a summary report of each job in the survey, with breakouts of data by revenue size, industry type, geographic area, etc.

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.

Bankruptcy Compensation - The development of retention, incentive and severance programs for companies in the pre-filing, reorganization, post-emergence or liquidation phases of the bankruptcy process. These complex projects include the integration of each of the following constituencies: law firms, client top management, boards of directors, creditor committees, and the bankruptcy court.

Retention Plans - The design of a retention plan for companies at risk of losing key employees. This includes a process for selecting key employees, setting payout levels and timing, the development of the plan document and plan communication.

Weapons of Mass Excess - The business consulting service in the field of executive compensation that helps protect companies from irresponsible, unethical or illegal use of compensation.

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Investment Advisory Services offered solely through Investment Advisory Representatives of NFP Securities, Inc. a Federally Registered Investment Advisor

Smith, Frank & Partners, LLC is an affiliate of NFP Securities, Inc. and a subsidiary of National Financial Partners Corp., the parent company of NFP Securities, Inc.

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

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