The CFO RoundTable Boston Over 120 CFOs and other senior financial
executives joined us at Bentley University
for The CFO RoundTable Boston’s
November program

Effective compensation strategies are one of the key pillars to a competitive and healthy business. Being able to attract key talent, retaining your existing base and continuing to incentivize productivity at all stages of a business lifecycle can influence the growth and footprint of any company.

However, creative compensation strategies change over time, and are influenced by a myriad of internal and external factors. On Wednesday, November 13, 2013, 100+ CFOs joined us at The CFO RoundTable Boston as we presented Creative Compensation Strategies From Startup to Exit, where our expert panel reviewed compensation strategies for early-stage, high-growth companies, as well as issues and opportunities specific to companies on an exit path.

Please click here to be directed to our speaker presentations and event photos.

Our speakers included:

 

What We Learned

Compensation Strategy First Starts A Clear Philosophy

Chris Sullivan, CFO, Gazelle Chris Sullivan, CFO,
Gazelle, comments on
his compensation
philosophy and strategy

In the ground-building days of your organization, it is key to build and support a philosophy around your compensation practices. This philosophy should be based on your company stage, your projected growth, competitive benchmarking, and further, should support the culture and community you want to build in your organization. 

It is this philosophy that is going to dictate your compensation strategy and the decisions you make at all stages of your business lifecycle. Further, it is key to your organization health that you communicate this philosophy early and often, as well as implemented consistently. 

Your Company Stage Will Determine Your Comp Plans

Certainly a bit of a no-brainer, but it is important to remember that your compensation plans and philosophy will change as your company grows and evolves. For example, a comp plan for a start-up company will seem incredibly simple compared to that of a well-established public company. 

However, it is important to remember that the comp decisions made in the early stages of your business lifecycle can have long-reaching impacts on your future. 

You Will Never Have Enough Market Data

Al Zink, Care.com Al Zink, SVP of HR,
Care.com, comments on
compensation packages
that evolve over time

So much has changed in the past 30 years. New generations of employees, who are driven by different incentive structures than previous generations, have stepped up and into companies everywhere. The amount of cash that’s needed to retain and motivate your high-talent employees has increased significantly. Prospective employees are entering interview processes well-educated on competitive market and total rewards packages. 

The point is this – you can never get enough data to truly understand how the market is competing for the same talent as you. Therefore, get your hands on as much data as you can, whether it be through paid data sites, or even through the interview process itself, to understand how your compensation strategy stacks up against your peers. 

Further, use those exit interviews to your advantage to understand what, if anything, needs to change about your compensation strategy to retain and satisfy your employees. After all, it’s rare that your employees will feel comfortable enough to speak so frankly about what did and did not work about their time with you. Encourage them to speak up about your compensation strategy or even perhaps your corporate growth, and whether it played into their decision to leave your organization. 

Employees Are In It For Different Reasons

Depending where you are in your corporate lifecycle entirely dictates the type of employee that you’ll have. For example, it’s no secret that the risk-takers regularly join start-ups for the promise of something bigger down the line. Conversely, those who need structure and clear chains of command more frequently join established organizations. 

Therefore, as your company grows and evolves, it’s important to focus your compensation strategies on the Total Rewards that employees receive, including cash, equity, benefits and recognition, and how that will incentivize and affect their behavior. For example, while start-ups are more cash-constrained when competing for talent, they have a bevy of other attributes that they can offer to talent as part of their compensation package that larger companies can’t consider. 

Collaboration and Transparency Are The Keys To Success

Creative compensation strategies for CFOs  Ned Philie, Senior Managing
Director at Robert Half International,
moderated our Creative Compensation
panel

According to one panelist, “The biggest mistake you can make is to put a comp plan together and then present it to your board. Your board has insight into comp plans at other companies, so submit for their feedback early and often to ensure it’s aligned with their expectations and the market.”

Yet collaboration shouldn’t just happen at the board level. As CFO, it is your responsibility to work hand-in-hand with other business leaders to ensure that your comp plan philosophies and deliverables are aligned. For example, one panelist noted that his CEO once stated that “If my CFO and VP of HR come into my office and agree on something, I’d be a fool not to listen.” 

Once you have a comp plan that’s been bought into at the board and executive levels, it’s time to get employee buy-in, and this is done entirely through transparency. Employees must have a clear understanding of not only the philosophy that drives your compensation strategy, but also how that philosophy affects the decisions you make, including bonus structures, promotions, stock ownership, and so on. 

Speaker Presentations and Photos

To download copies of our speaker presentations, click any of the following links (A PDF copy will be downloaded to your computer):

 

For more information on this or any of the upcoming events The CFO RoundTable has planned, please click here.

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