Principles-Based Executive Compensation and Corporate Governance
The Delves Group has developed principles-based corporate governance and executive compensation services. These services are designed to broaden the dialog about the effectiveness of executive pay programs in achieving business strategies in shareholders’ interests. The Delves Group broadens the conversation and provides a principles-based framework for a wider discussion of compensation objectives.
In its Principles-Based Corporate Governance and Executive Compensation practice, The Delves Group provides:
Principles Development. Starting with the company’s purpose and the IDEC principles, The Delves Group works with the Board and Management to develop overarching principles for compensation, governance, or both. Clients gain a rational and understandable framework from which to guide compensation and governance decision making throughout the firm.
Principles Assessment. The Delves Group assesses a company’s current governance or compensation plans and practices against its principles, using a value-neutral scale. Clients can gauge the effectiveness of existing programs and will have a roadmap for improvements that provide the incentives and motivations they require, based on principles they hftave developed.
Principles Training. The Delves Group trains management and Human Resources staff to use the organization’s new set of principles. Clients understand how principles inform decisions and practices throughout the organization and learn to develop and communicate plans and programs more effectively.
Principles provide a thorough and consistent conceptual framework for making tough decisions, designing incentive plans, and creating optimal alignment. They also bring clarity to corporate governance and provide a common language for compensation across entire companies.
In the words of one Delves Group client, “Compensation principles serve as guidelines that boards can use to keep their bearings amid the rigors of corporate oversight. By adopting their own sets of principles, boards in different industries can distinguish themselves as favoring sound compensation governance.”
How Does Principles-Based Executive Compensation and Corporate Governance Work?
Learn how the Delves Group brings the power of principles to executive compensation and corporate governance. Read More >>
Who Develops Executive Compensation Principles?
Visit the Independent Directors Executive Compensation Project (IDEC) website for an overview of compensation principles in development and postings of existing and implemented principles.
What Has Been Published on Principles-Based Compensation and Governance?
Visit our Research section for a comprehensive library of articles on principles-based compensation and governance, as well as other relevant compensation topics. Recent articles focused on principles include:
“Best Buy’s Comp Chair: Why We Adopted Comp Principles” by Frank Trestman
Frank Trestman, a Best Buy director and former chair of its Compensation and Human Resources Committee, explains the company’s desire to 1) send an affirmative governance message to shareholders and employees, and 2) help the board keep its bearings in the rigors of corporate oversight. He explains the executive compensation principles Best Buy adopted as a result.
Best Buy Adopts New Exec Comp Principles
An interview with Best Buy Director Frank Trestman on the new principles of executive compensation that the company adopted and shared in its proxy statement filed on May 11, 2010: alignment, accountability, engagement, purpose and optimization. Best Buy is the first company to customize principles based on those developed by the IDEC Project.
“Principles-based Governance of Executive Compensation” by Don Delves and Pastora San Juan Cafferty.
This is an update on the IDEC Project. San Juan Cafferty and Delves explain the importance of principles-based compensation, share the six principles that Project participants advocate as a starting point for boards, and mention that two boards are committed to this process while others are considering it.
