RSM Resources

These are very interesting times we are experiencing, especially in the area of corporate business. When accounting for stock options and board of director governance make the front pages, times are certainly changing. The substantial interest in and scrutiny of executive compensation will probably remain in the spotlight for regulators, investors, boards of directors, executives and the press for quite some time.

The future success of any company depends upon the performance of its key executives, and a sound executive compensation program is essential for properly recruiting, motivating and retaining a high-quality executive team. Organizations seeking to develop such a program must now navigate through all of the regulatory, reporting and design constraints which characterize the current environment, which is as difficult as it is critical.

Long-term compensation plans should be seriously considered for privately-held companies for the reasons stated above. In a nutshell, they can help companies attract and retain the talent they require to drive the company’s longer term goals. These plans, however, should be carefully designed and implemented with appropriate communications to ensure they achieve the desired results. A well thought-out plan can have a very positive long-term impact. However, a poorly designed plan can have a major negative impact.

 
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