10 executive compensation and governance questions to answer before your initial public offering

Amid fluctuating market conditions, the outlook for initial public offerings (IPOs) on U.S. exchanges in 2025 remains cautiously optimistic, with indications of a potential rise in both the number and aggregate value of public listings in the latter half of the year.

Privately-owned companies considering an IPO should consider taking the following steps to ensure that their executive compensation plans and governance policies are aligned with both continuing and new shareholder expectations. All companies considering an IPO should be able to answer 10 critical executive compensation and governance questions before going public. READ MORE

IT compensation satisfaction at an all-time low

A recent survey found IT compensation satisfaction has hit a record low, with relatively few IT workers saying they are satisfied with their pay. Industry observers, however, suggest the issue might not be entirely about money, leaving CIOs with options for boosting morale on thin budgets.

In its latest IT salary survey, tech careers site Dice found IT worker compensation satisfaction has recently plunged, “with only 41% of tech professionals reporting they were either ‘very’ or ‘somewhat’ satisfied with their compensation. This represents a significant decline from previous years.” READ MORE

Sec. 280G and the evolving executive compensation landscape

Since the enactment of Sec. 280G of the Internal Revenue Code as part of the Tax Reform Act of 1984 (Division A, Deficit Reduction Act of 1984, P.L. 98–369) and the issuance of the final Treasury regulations in 2003, the landscape of executive compensation arrangements has changed significantly. In part, arrangements have developed in response to the use of more sophisticated employer structures, changes in capital markets, and demands of management. The effect is that applying Sec. 280G in certain situations is more challenging because it does not address or contemplate considerations that now arise 40 years post–enactment. This item discusses certain issues that may arise in evaluating the current landscape, but other issues may arise as well. Determining the Sec. 280G consequences requires careful analysis of organizational structure as well as payments and benefits provided under executive compensation arrangements. READ MORE

ADP Reports Private Sector Employment and Compensation Both Increased in March

According to the ADP National Employment Report released on Wednesday, private sector employment increased by 155,000 jobs in March. Year-over-year, annual compensation was up 4.6%.

In March, manufacturing delivered stronger-than-average job gains for the second straight month. Construction hiring slowed. Natural resources and trade, transportation, and utilities lost jobs. READ MORE

The Power of Pay-for-Performance Sales Compensation Plans

With the current economic concerns and disruptive business environment, organizations are unsure about their growth prospects (and from where that growth will come). Worries about tariffs and a potential recession are leading them to revisit their sales compensation plans.

In response to rising costs and potential declines in spending, businesses are increasingly implementing pay-for-performance strategies. The Alexander Group’s recent sales compensation trends surveyOpen in a new tab found 71% of polled organizations are emphasizing this approach in their comp plans. READ MORE

Workers in these states just got a pay raise

The corks have been popped, the calendar pages turned and a day that promised fresh starts also brought with it some pay bumps for millions of Americans.

Hourly minimum wages increased in 21 states on Wednesday, as part of ongoing efforts to have pay keep up with the rising cost of living or to meet milestones such as a $15-an-hour minimum wage. The increases — which range from 18 cents to $1.75 (hello, Delaware) — are expected to affect more than 9.2 million workers, raising their pay by a combined $5.7 billion, according to the Economic Policy Institute. READ MORE

Income protection: Are your executives fully covered for disability?

One of the ways organizations invest in attracting and retaining top executive talent is through comprehensive compensation packages. However, many companies overlook a critical gap in their executive benefits strategy: adequate income protection through disability coverage. While standard group long-term disability coverage may appear sufficient on paper, it often falls short of providing true lifestyle protection for high-earning executives. READ MORE

Enduring high-performing companies take a best-fit executive pay approach

High-performing organizations tend to set the bar for all others. They perform well financially, attract and retain the best talent and exhibit best practices within the business as well as in their communities. Another way they stand out is through their executive pay programs.

We recently explored how enduring high-performing companies pay their executives. Our findings supported what we first discovered a decade ago: These companies follow a path less traveled. READ MORE

KPMG International report finds growing link between sustainability and executive pay

A new report from KPMG International has revealed that a growing number of companies are linking sustainability targets to executive pay.

375 large, publicly listed companies across 15 countries were studied for the report, ‘Incentivizing long-term value creation: Linking sustainability metrics to board members’ pay’, examining the adoption of sustainability in boardroom pay. READ MORE

The era of job hopping for a better salary may be over — crushing the dreams of disloyal Gen Z workers

Gen Z can no longer hop to the top.

The days of jumping from role to role to boost salaries are over in the current job market, Fortune reports.

According to new data from the US Bureau of Labor Statistics and the Federal Reserve Bank of Atlanta, workers who remained in their current jobs earned a 4.6% salary bump in January and February while those who changed roles during the same time frame saw a 4.8% increase. READ MORE

Executive Compensation For ESG Metrics: A Step In The Right Direction But Still A Long Way To Go

In today's corporate world, there's a lot of buzz about linking executive pay to Environmental, Social, and Governance (ESG) metrics. One specialist recently trumpeted: “Companies have crossed the Rubicon in integrating environmental, social and governance performance.” The idea does indeed sound great: reward leaders for steering companies toward sustainable and ethical practices. But are these ESG incentives genuine, or are they just for show?

A recent study we published, entitled "All Hat and No Cattle? ESG Incentives in Executive Compensation," attempts to answer this very question. The research delves into executive compensation data from 674 executives across 73 major European firms between 2013 and 2020. The findings are quite revealing. READ MORE

Skyrocketing CEO pay can lead to huge corporate culture problems and whistleblowing employees

Americans have long been dissatisfied with growing pay gaps between CEOs and employees. Now, researchers say that this tension can generate internal discontent and even increase the likelihood of corporate whistleblowing. 

CEO-employee pay disparities erode employee loyalty and lead to greater worker “willingness” to inform on their companies, according to a recent study from researchers at the University of Texas at Dallas. In companies with more significant pay disparities—especially when individuals believed they could find work elsewhere—employees were significantly more likely to report on their companies. The driving force behind that is perceived unfairness, according to Dr. Riki Takeuchi, a professor at the University of Texas and an author of the study.  READ MORE

Analyzing executive pay-performance alignment

There is a broad consensus among compensation consulting firms and proxy advisors that the conventional approach to US executive pay – providing a high percent of pay at risk withtargetpaysetatthe50th percentile – achieves the three basic objectives of executive pay. The high percent of pay at risk ensures a strong incentive to increase shareholder value, while setting target pay at the 50th percentile retains key talent (because target pay doesn’t drop below the 50th percentile) and limits shareholder cost (because target pay doesn’t rise above the 50th percentile). READ MORE

Matters To Consider for the 2025 Annual Meeting and Reporting Season: Executive Compensation

Companies should consider their recent annual say-on-pay votes and best practices for disclosure when designing their 2025 compensation programs and communicating about those programs to shareholders. Companies should also review the latest say-on-pay trends, including overall 2024 say-on-pay results, factors driving say-on-pay failure (i.e., those say-on-pay votes that achieved less than 50% shareholder approval), say-on-golden-parachute results and results of equity plan proposals, as well as recent guidance from the proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis. READ MORE

Pay Ratios: CEO and C-Suite Compensation in the Russell 3000 and S&P 500

The CEO is consistently the highest-paid executive in the C-Suite, but how does CEO compensation compare to that of other executives? This report examines the ratio of CEO total compensation to that of chief financial officers (CFOs), chief legal officers (CLOs), chief operating officers (COOs), chief human resource officers (CHROs), chief marketing officers (CMOs), and named executive officers (NEOs) as a whole, across the S&P 500 and the Russell 3000. READ MORE

The Role of Rewards When Employees Perform Extra Work

More than 75% of employees are asked at least weekly to take on extra work beyond the tasks and/or hours spelled out in their job description, according to a new report from LiveCareerOpen in a new tab, a resume builder website. While the risk of burnout is real, there also is a range of positive outcomes for those who tackle additional responsibilities.

LiveCareer surveyed 1,160 U.S. workers in December 2024 who reported the benefits of additional work, including skill development (33%), financial rewards (32%), closer relationships with colleagues (31%) and opportunities for career advancement (31%). READ MORE