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Executive Compensation

Today’s Challenges and Today’s Solutions
In today’s environment, perpetual regulatory challenges and heightened market scrutiny make developing exective compensation solutions for corporate leaders a more challenging task than ever before. To attract and motivate leaders in this climate, companies need to balance a number of frequently conflicting requirements in order to be successful. Today’s solutions need to:
  • Address short-term and long-term objectives
  • Enhance corporate performance and support enterprise strategy
  • Reflect an appropriate sharing of the increased value that leadership creates
  • Be defensible to increased regulations and corporate scrutiny, while still being attractive to those who work within the plans
In the past, many solutions have been designed to address single issues: tax concerns, attraction and retention needs, increasing performance leverage, share ownership requirements, momentary business challenges, or industry past practices. Today’s solutions must address all these issues, while demonstrating that plan participants have truly created value. Questions that need to be addressed include:
  • How much of the new value can we and should we share with our leaders?
  • What represents truly outstanding performance?
  • What are the top line growth and earnings opportunities that leaders can influence?
  • What are the real “stretch” goals?
Aon Hewitt’s Executive Compensation and Governance Consulting Group is uniquely positioned to help your organization address these needs, and develop the right leadership compensation for your business. We are one of the largest, best-capitalized global executive compensation operations in the world with an unparalleled depth of resources, quality processes, and scope of experience.
Aon Hewitt brings solid business understanding, technical sophistication, and unparalleled global data to develop solutions that work for you. Our expertise in tax, regulatory compliance, corporate governance, plan design, and competitive intelligence enables us to design custom solutions that add value to your business, motivate plan participants, and represent “best in class” programs that will be positively received by various constituencies. In short, we provide solutions you can trust.
Advisory Capabilities and Resources
Corporate Governance
  • Director education
  • External market and legislative updates
  • CD&A and proxy development
  • Committee and CEO evaluations
  • Tally sheet preparation
  • Pay/performance and disclosure review or analysis
  • Testing vs. ISS models for acceptable practices
  • Communication of Executive Compensation
Program Design
  • Equity and cash-based long-tern incentive design
  • Performance metrics analysis and selection
  • Employment contract analysis
  • Change-in-control and severance plan design
  • Nonqualified SERP and restoration plan design and costing
  • Deferred compensation plan design/costing
  • Total rewards architecture and monitoring
  • Pay/performance analysis
Executive Compensation Analysis
  • Custom peer group selection and pay/performance analysis
  • External market studies and job pricings
  • Competitive market valuations for salary, bonus, long-term incentives, benefits, and perquisites
  • Pay and performance alignment
  • Best practice and emerging trends research
  • Outside director compensation design/analysis
  • Black-Scholes, Monte Carlo, binomial, and FAS 123R calculations and support
  • Equity grant run rate and dilution analysis
  • Tally sheet preparation
  • Interactive modeling of proposed compensation programs and business strategy
Pay and Performance Alignment
  • Annual and long-term metrics selection, hurdle selection, and modeling
  • Pay element mix selection to ensure consistency with total rewards strategy
  • Company differentiator identification and the success factors for inclusion in rewards plans
  • Review of checks and balances to reward structure, goal setting, and payout curves
  • Annual risk assessment of compensation programs, metrics, governance practices, and outcomes
Technical Support Services
  • Special program design, implementation, and communications
  • Long-term incentive plan design and shareholder approval
  • Share pool analysis and usage
  • Internal revenue code section 162m assistance
  • 409A compliance and analysis
  • Plan documentation and award agreements
  • Tax, accounting, and securities law analysis and excise tax calculations
  • Tracking of legislative and regulatory changes

Available market data from the Aon Hewitt Total Compensation Measurement™ database.

Europe
Austria, Belgium, Bulgaria, Czech Republic, France, Germany, Greece, Hungary, Italy, Netherlands, Poland, Romania, Russia, Slovakia, Slovenia, Spain, Switzerland, Turkey, United Kingdom

Asia-Pacific
Australia, China, Hong Kong, India, Japan, Malaysia, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, United Arab Emirates, Vietnam

The Americas
Argentina, Brazil, Canada, Chile, Mexico, Puerto Rico, United States, Venezuela