SERVICES
What we do
Every engagement consists of a scoped deliverable at an all-inclusive fixed fee. Our most common deliverables are comprehensive executive and board compensation reviews. We are also asked for one-off deliverables such as dilution or position benchmarks, equity valuations, and opinion letters on reasonableness and unusual pay situations. Engagements typically include one or more of the following services.
Competitive Benchmarking
The foundation of most executive and board pay decisions is competitive benchmarking against a peer group. Simply adding up the numbers, however, rarely produces an accurate market view. We apply our benchmarking experience to the data to develop a true view of the market.
Prevalence is not a recommendation
A compensation practice or a competitive pay range can be common across your peer group and still be wrong for your company. Best practice is derived rather than copied: from what the business is actually trying to achieve, from what you need to recruit and retain over the next year and the next five, and from what your shareholders will support. Competitive data tells you what other companies do. It does not tell you what you should do.
Board compensation review
Director compensation is the one pay decision a board makes about itself, and it receives the least judicial deference. Absent shareholder approval of specific amounts, directors defending their own pay may have to demonstrate the decision was entirely fair — a standard met through evidence of process: a defensible peer group, a written policy, and an independent adviser.
Dilution analysis
Equity is often the major pay lever at a small-cap company, and every share granted is a share of the company transferred from existing holders. Dilution analysis measures that cost in two terms: overhang, the portion of the company already committed to equity awards, and run rate, the pace of new grants each year. Both are benchmarked against peers, and both give boards guidance on pool size and a forecast of when an equity pool will run out of shares.
Equity design
Design determines whether a grant does what it was intended to do. Options or full-value shares, time vesting or performance conditions, units or shares. Each choice changes the retention hold, the accounting cost, the shares consumed, and what the recipient believes the award is worth. Options concentrate reward in share price appreciation and require more shares to deliver the same value. Restricted shares retain through a downturn but pay out without growth. Performance conditions strengthen alignment, but only where goals are stable enough to set years in advance.
Bonus design
An annual bonus plan is a communication device as much as a payment mechanism: it tells the executive team what the year is about. The structural questions are whether payout is formulaic or discretionary, how far the range runs above and below target, and how many goals the plan carries. Should you use defined targets with an opportunity to earn above them for stretch results, a purely discretionary plan that allows flexibility as goals change, or some mix of the two?
Performance metrics
Metrics are where a plan either aligns with the business or quietly works against it. A sound measure passes three tests: the executive team genuinely influences it within the period, it can be calculated without argument after the fact, and achieving it advances the strategy rather than merely registering activity. Too many metrics dilute focus; too few concentrate risk in a single outcome. For pre-revenue companies the honest measures are operational and milestone-based, and a plan that pretends otherwise produces either windfalls or dead targets.
Emerging trends
Compensation practice does not sit still. Market practice drifts: performance conditions spread downward from larger companies, equity mix moves with the cost of capital, and what was competitive three years ago quietly stops being so. Proxy adviser policies are revised, disclosure requirements change, and a single court decision can redefine what counts as a defensible process. The value of an adviser tracking this is not commentary. It is being told what has changed that may affect your compensation decisions.
Proxy disclosure
Proxy disclosure is where a year of compensation decisions becomes public — the summary compensation and equity tables, the director table, and the pay-versus-performance disclosure, which requires remeasuring award values year over year rather than reporting grant-date figures. At most small companies this work falls into the gap between counsel, who drafts the document, and finance, which holds the data but not the compensation context. We prepare the tables and supporting analysis, or work alongside your team, so that what is disclosed matches what the committee actually decided.