Why Human Resources Executives Can Be The Stewards Of Compensation

A Q&A with DHR International and Farient Advisors

On November 4, 2014, Jerry McGrath, DHR International’s Global Human Resources Practices Leader, invited me to join him at the Harvard Club in New York City for a Chief Human Resources (CHRO) executive breakfast. With more than 30 HR executives in attendance, we thought it would be fun to create a program with dynamic audience engagement in the style of the well regarded television program “Actors Studio.” As an executive compensation consultant for more than 30 years, I have found that the expediency and overall success of our work depends on great collaborations with the HR community. That’s why I want to share an excerpt from our breakfast conversation.

Jerry McGrath (Jerry): Robin, broadly speaking, what is happening in executive compensation right now?  What would you say are the biggest challenges?

Robin: There is always a prurient interest in executive compensation that never seems to leave the headlines. We are all in the middle of that and of course we want to avoid being in the headlines, which always makes our work interesting.

At the moment, the focus in executive compensation is on the CEO Median Pay Ratio disclosure, also known as Provision 953b of the Dodd Frank Act. This pending disclosure will require public companies to report the CEO to median worker pay ratio. The big question right now is, “Is that going to mean much?”  Since there are numerous ways companies can disclose the CEO pay to median employee pay, there is no way to compare the ratio across companies, making it of questionable value.

Jerry: How are you advising your clients on this topic?

Robin: My advice on this is to look at the preliminary calculations, see how you’d interpret the numbers for shareholders, and then leave it at that. One of the things for human resource executives to consider is how to disclose and communicate the findings, and to what extent can you keep it low key?

Jerry: How do you work with HR directly?

Source Article from http://www.forbes.com/sites/robinferracone/2014/12/02/five-insights-into-why-human-resources-executives-can-be-the-stewards-of-compensation/
Why Human Resources Executives Can Be The Stewards Of Compensation
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