Designing the High-Performance Compensation Plan That Works

  • Authors:
    Howard Muson
  • Publication Date:
    January 2007
  • Report Number:
    A-0220-07-EA

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In the last decade, many companies have adopted variable-pay plans to reward performance and hold down fixed costs, but many small and mid-size companies are revisiting these plans. The new rule requiring expensing of stock options complicates the task for growing public companies searching for ways to attract and reward key employees. The report examines the practices of four mid-market companies who had to rethink their compensation policies, revealing some of the building blocks of an effective variable-pay program for all employees as well as for top executives.

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