Best Practices for Effectively Working with a Compensation Committee

February 23, 2021

**This is a republication from ChicagoSHRM, February 2021   

As HR leaders, you are typically expected to serve as a strategic partner to the CEO and Compensation and/or Talent Committee of the Board or the Board itself if this sub-committee does not exist, as in some smaller organizations.

money-2180330_960_720.jpg

If you are not involved with these meetings, why not. These tips and best practices provide you with actions on how you might evolve your role to have a seat at the table. As organizations are living organisms, so are your roles as HR leaders. Be open to change and lead the way.

The HR leader’s role has become more critical and broader with relation to the Board as shifting cultural norms occur, ie.,  inclusion and diversity, environmental, social, and governance, and other trends. You need to be more aware of external forces influencing executive compensation, board representation, and other impacts to HR. Your role as strategic partner to the Board varies as each company defines the relationship differently.

For first time leaders in this role, the following offers some tips and best practices to meeting and exceeding others’ expectations of you:

Your Behaviors and Expertise     

  • As HR leader, your role is to set the standard of behavior for the entire company. Others expect HR to be the best and set a high bar for trust, credibility, competence, and respect.
  • Trust is not a given, it is earned. HR leaders must realize a job title does not grant automatic credibility. Be your best or better. Admit when you do not know an answer, offer to research and follow-up. Meet commitments. Earning trust takes time.
  • Be mature. That may seem unnecessary to state, but in this highly delicate role, you must be able to deal with boss (the CEO) and peer (the C Suite’s) compensation and performance, sometimes termination issues. Your relationship with the Compensation and/or Talent Committee is of utmost importance to be successful in your role.
  • Be proactive. Establish and update a full year’s schedule of meetings. Often this means partnering with the head of Legal and/or Finance.  Become “connected at the hip” to these two critical for success peers.
  • Build a highly competent team that effectively supports you. Your team should make your job easier. As head of HR, you need a competent compensation/talent leader who you can confidently delegate responsibility to. If you are at a smaller company and do not have such an in-house resource, cross-train a trust-worthy subordinate to assist.
  • Read plan documents. Many HR leaders are not aware of Plan minutia. This is your time to shine and be “the” expert assuming you are typically discussing compensation plans and possibly executive benefits/perquisites with this committee or other legal plans such as retirement programs and medical/welfare programs.

Planning Meetings

  • Lead the preparations as project manager for the meetings. Established detailed timelines and include all relevant team members.
  • Create the annual agenda and calendar of events for the Committee, including shareholder meetings, so the meetings are cyclical and well-planned.
  • As each Committee meeting approaches, set more frequent sub-team project member meetings to ensure all pieces and parts are organized and assignments are completed on-time or early.
  • Almost always there are last minute changes to the “deck” provided to the Committee. Plan for this extra time. Block your calendar for last minute changes.
  • Best practice is to distribute the “deck” out in advance by at least a week, if feasible. Committee Members want to know ahead of time what will be discussed. Given they likely have a full-time job and possibly serve on other Boards, expect that they do not have time to read and be fully prepared for your meeting at the last minute.
  • Spell check. Read the document backward. It is unacceptable to have easily avoidable mistakes. It can quickly erode your reputation. This is particularly important when reporting numbers and dates. Make sure they add up and make sense. It is guaranteed at least one of the Committee Members will add up the values to make sure they are accurate.

The Meetings

  • If the meeting is out of town, always fly in the day before, and fly out the day after. Often times, there are last minute pre- and post- discussions that it is important for you to attend. Running out early is another way to deteriorate your reputation and perceived commitment.
  • Also, if the meeting is out of town and hard copy data is used during the meeting, check with the hotel or meeting venue business office to ensure that last minute, ideally 24/7 color printing capabilities exist.
  • Expect the unexpected. Bring appropriate back up documents and back-pocket related data to the meeting.
  • Be accountable. If a mistake happens, take responsibility, and apologize. Do not be defensive or insecure and blame others, another way to deteriorate your reputation. Accountability impresses.
  • If your organization uses a third-party consultant, to attend and/or participate, prepare well in advance with this consultant. No surprises at the meeting keeps you informed and in the loop.
  • Always debrief with the sub-team shortly after the meeting and notate any approvals or changes to decisions made during the meeting.
  • Save all Committee approved documents particularly those with handwritten signatures. Keep a historical file for your successor.

These examples are intended to promote and advance the strategic nature of what an HR leader can and should be. Perhaps you are not yet at this level. Save this article for when you get there. We should all continuously improve our competencies and advance our careers.​​​​​​


Share This Post

Back to Blog

The Overture Group

Iowa

425 2nd St. SE Suite 801
Cedar Rapids, IA 52401
(319) 366-3688

Illinois

550 Warrenville Rd. Suite 210
Lisle, IL 60532
(630) 352-4029

 

About Us

We help you attract, retain, and motivate the key talent necessary for success in complex industries such as manufacturing, wholesale, distribution, non-profit, financial services, and healthcare.

Subscribe to our Mailing list

Receive the latest news and updates on search, recruitment, and compensation consulting!

E-Mail Signup

Connect With Us

Follow us and connect via social media for updates and more.

Copyright © 2021 The Overture Group - All Rights Reserved. Web Application by Informatics, Inc