Good incentives multiply the benefits of talented management and superior strategy, just as poor incentives can negate them (or worse). A “mechanism” encompasses all of the incentives and constraints faced by employees: it is the source of their motivation and accountability. The right mechanism insures that managers and shareholders grow rich together.

Most firms (and most other consultants) build incentive plans around specific strategies, then work hard to prevent managers from “gaming the system.” Our incentive mechanisms set up “the game” so that shareholders will win if management wins, regardless of the specific strategy they pursue. This can only be achieved by integrating performance measurement, target setting, and employee rewards in a system consciously built to encourage value-creation.

Our extensive research and experience keeps us at the forefront in developing organizational incentives, as well as the tools for evaluating them.

We can help you:

Review and optimize the use of compensation metrics

Determine the optimal mix of fixed versus variable pay

Design a simple, yet effective mechanism for funding and distributing variable compensation

Recommend policies for granting and vesting equity pay

Calibrate and review incentive plans across the full spectrum of company performance