It has been frequently observed that many deals ultimately fail because of unplanned HR consequences: expected synergies don’t come to pass or employees from different companies simply don’t work well together.  Mergers and acquisitions present both tremendous opportunities and risks from the standpoint of compensation and benefits, with chances to replace outmoded practices at a time when change is expected.  However, there are few tried and true formulas for success.  “If you’ve seen one deal, you’ve seen . . . one deal!”  In this context, our range of experience, leading or supporting compensation and benefits strategy and integration planning on over 20 deals in both the media and IT industries, is brought to bear.  We proceed based on business needs, not preset answers.

Executive compensation continues to draw considerable scrutiny from press, the Government, employees and unions.  Often, the actual dollars at stake may not be as significant as the impact on the perception of the company by key stakeholders.  And matters have become more complicated as Board Compensation Committees have taken on greater accountability for oversight.  Our services in this area include:

Total compensation design – How should the total package be constructed using salary, annual bonuses, long-term incentives, executive benefits and perks?
Total reward communications – What can be done to insure executives understand their packages and perform to simultaneously maximize both shareholder value and their own compensation?
Incentive design – Should long- and short-term incentives pay for the same things or are different measures appropriate for different plans?  Should rewards be driven solely by financial results or a balanced scorecard?
Executive compensation reporting and compliance – How can we insure maximum transparency in reporting on executive compensation to both shareholders and regulators?
 
 

We usually recommend a very structured approach to assignments in this area, proceeding in the following way:

What is the nature of the product or service and the marketplace in which it s delivered?  Is it a stable and mature or volatile and new market?  Is competition based on price, service or product differentiation?
What is the company’s go to market strategy?
How are sales and marketing roles designed to support that strategy?
What performance measures best capture sales excellence?  To what extent is pay driven by financial results versus other measures?

After these issues are fully fleshed out, the actual design and structure of an incentive can be developed.  Often, this may be the easiest part of the project!

 

The management of base salaries is often given insufficient attention. Flawed designs and programs can lead to employee relations issues, wasted resources, inefficiency, and sometimes litigation.  Our services in these areas include:

Job documentation – How much information is needed and for what purpose?  How will the information be stored and periodically updated?  How are new jobs created?
Job data (HRIS) needs – What job attributes are needed for ongoing analysis of the workforce (e.g., job functions and sub-function like “Finance” and “Treasury,” respectively)?
Job hierarchy design – Does a “broad band” or more traditional salary grade structure better serve the business?
Job evaluation – How does a company balance a need for rigor with the desire to minimize unnecessary bureaucracy and tedious processes?

Our firm brings a documented wealth of experience in all of these areas.
 

We perform benchmarking analyses covering both pay levels and pay practices to support our work in executive compensation, salary management, and sales compensation.  In a world, where most HR staffs feel under-resourced and over-surveyed, we always take pains to insure that relevant data does not already exist.

 

Many progressive employers today wish to pursue pay equity analysis and comparable worth studies for reasons that go beyond mere compliance or defending against claims of unfair treatment.  Pay equity studies can be done as part of a broader commitment to employees to provide an environment where individual growth is encouraged and individual contributions are recognized.  Typically, engagements in these areas are carried out jointly with the client’s employment law counsel.

 

The actual money spent on most recognition programs is usually trivial in comparison to any other form of compensation. Yet, when done well, recognition programs offer employers more “bang for the buck” (in terms of employee morale and behavior) than any other direct expenditure on employees.  

To be most effective, recognition needs to be seen as a program that is entirely independent of compensation.  This is true even though the administration of recognition programs usually falls under a compensation department.

In 2004-5, Richter led the design of recognition program (called Ovation) for NBC Universal, which, until that time, had no program apart from informal cash awards.  Ovation was awarded the 2005 Incentive Marketing Association’s Circle of Excellence Award, beating out several Fortune 50 competitors.

 

Richter Associates does not engage in the unauthorized practice of law.  Similarly, we are not a CPA nor a certified tax advisor.  Although we always strive to produce work that is legally compliant, financially justifiable, and tax advantageous/compliant, we expect that our work will be reviewed by a client’s legal counsel, finance team, and tax group as appropriate.