Executive Compensation

Executive Compensation

Johanson Group’s normal approach to Executive Compensation is one of a long range approach that seeks to recruit, reward, retain and retire key personnel.  When we are working with executive management positions, we determine each base salary’s last five year average figure before retirement at 65 and then use 70% to 80% of these amounts as a basis for retirement planning.   We take these projected figures and subtract out any existing retirement plan funds (at retirement) such as 401(k), social security, etc. and the remaining balance is the amount that is used to create various types of retirement offerings to close the gap.  The following items are common to supplement an executive’s basic retirement plan:

Employee Stock Option Program (ESOP)
Bank Stock Granting
Stock Appreciation Rights or Performance Share Plan
Phantom Stock
Bank-Owned Life Insurance
Variable Life Insurance
Salary Continuation Plan (Pays a flat amount annually at retirement for “X” number of years)

The recruit portion includes a competitive base salary, health insurance, car allowance, club membership, paid time off for vacations, basic life insurance and other common benefits which most all other employees enjoy.

The reward piece typically involves a formalized incentive compensation plan where three to five stretching goals or metrics are established and bonus dollars are paid one to two months after the performance period.  The incentive compensation program that we like includes four payout levels: threshold, target, target plus, and target maximum.  The payout range of the CEO is roughly 30% to 50% of base salary, 25% to 40% of base salary for the CFO, COO and CLO, and 20% to 35% for the next layer of management.

The retain and retire aspects typically include a combination of the items above to close the gap between the 70% to 80% of final average pay and the current projected plan balances an executive would have through their 401(k) and social security.  If a Bank has publicly traded or internal stock, then stock options or stock appreciation rights can be provided to the executive.  If the stock is closely held, then phantom stock is an effective approach to provide an executive with the ability to realize the same return as the real stock.

________________________________

Download our free HR Guide to a Compliant, Equitable & Competitive Compensation program on the right or click below to contact us for a free demo!

New Comp Planning Software Launched for Mid-Size Companies

New Comp Planning Software Launched for Mid-Size Companies  

One of DB Squared’s partnering companies, , HRsoft – www.HRsoft.com – has developed a new software solution designed specifically for the needs of mid-size companies to plan how much to pay their employees.

Called Compensation Business Partner, this Cloud-based software manages four elements of pay, including:   market adjustments, merit increases, salary changes with promotions, and bonus awards.

The solution is pre-configured to support employers who want an efficient on-line way to plan compensation allocations when job classification, salary structure and budgets (DBSquared software DBCompensation develops these elements) have been formulated.   The new Cloud-based software guides the user through the entire employee pay adjustment planning process.

Companies gain efficiency with their salary budget by distributing salary budget funds in a way that meets their business needs.   Also, reports are available to review the data and for audit and control purposes.   Also, employees are paid and rewarded properly resulting in higher engagement and retention.

More information is available by contacting:   Ezra.Schneier@HRsoft.com    —    www.HRsoft.com

________________________________

Download our free HR Guide to a Compliant, Equitable & Competitive Compensation program on the right or click below to contact us for a free demo!

Effective Compensation Systems

Effective Compensation Systems

Mark Smith, CEO and Chief Research Officer with Ventana Research wrote a recent article titled, “Effective Compensation Systems Transform Human Capital Management” in his “Analyst Perspective” blog page.  Mark makes a case in his article for compensation management and its key role for organizations that want to engage and retain highly motivated and productive employees.

Mark states in the article, “Our experience and research in this field indicate that HR and corporate management obtain the greatest value from an approach that ties compensation to performance.”

Mark mentions that HRMS systems are evolving and the most progressive systems have greater flexibility with managing compensation options that go beyond the annual employee performance review and merit pay allocations.  For more information: marksmith.ventanaresearch.com

 

Learn more about DBSquared and HRsoft for compensation management solutions.

DBSquared is a nationally recognized company providing simplified HR technology that empowers our customers. We improve our customers’ return on investment by reducing employee turnover through the development of equitable and competitive base pay structures established with proven data-driven processes.  DBSquared’s SAAS solutions are continuously improving by way of recommendations from its customer users. Learn more at www.DBSquared.com

HRsoft supplies innovative Cloud-based compensation planning software solutions that automate the compensation planning process and workflow for employers.   These, in turn, help businesses enhance employee engagement and retention.   Scalable and supported by award-winning client service, HRsoft enables organizations to manage their compensation planning process in a centralized, secure system.   Discover more at:   http://www.HRsoft.com.

—————————–

Download our free HR Guide to a Compliant, Equitable & Competitive Compensation program on the right or click below to contact us for a free demo!

DBSquared & HRsoft Form a New Strategic Partnership

DBSquared and HRsoft Form a New Strategic Partnership to Help Employers Develop Data-Driven Solutions for Equitable Pay, Job Valuation and Compensation Compliance

Employers have growing needs in this area due to increased regulations from State and Federal government agencies addressing pay equity and fair pay.

—————————–

Fayetteville, Arkansas and Orlando, Florida  – DBSquared, an innovative supplier of solutions for employers to value positions and build pay structures for their companies using objective data and HRsoft, a leader in Software-as-a-Service (SaaS) compensation planning software, have announced a strategic partnership.

The partnership brings value to employers by using proven technology to address key processes and decision support needs relating to compensation.  A priority of employers is to re-evaluate their jobs based on objective criteria to determine if associates doing substantially similar work are paid equally.  Referred to as “comparable pay,” this is the main driver of growing regulations across the country.

Compliance with those regulations has become a hot topic among human resource professionals and senior executives.   A TV commercial by car manufacturer Audi aired during the 2017 Super Bowl highlighted the need for equal pay for men and women as its theme bringing further attention to the topic.

Blair Johanson, Principal of DBSquared, said:   “Employers use the DBSquared software and proprietary job valuing algorithms to build base pay structures that are consistent, objective and defensible.   Even if positions have different duties associated with them, the value derived from those jobs may be the same or similar.    The software offers an efficient way to evaluate and price jobs based on their value.   The result is a data-based model based on compensable factors.    Referred to as internal equity, this is a foundation of how people are paid in a company using an objective approach.”

Describing the partnership with HRsoft, Johanson noted:  “We recognize the desire of companies to have well-rounded solutions for their compensation issues.   That is the basis of the partnership with HRsoft.    In addition to using internal factors for pricing jobs, the software allows employers to use external market data in the development and validation of their pay structures.    A combination of internal and external data is the best way to value jobs.  The output of the DBSquared system is a complete job structure and corresponding pay ranges for all positions in the company, built using data.”

David Kennedy, CEO of HRsoft, commented:   “Compensation professionals have clear job valuing needs.   Their goal is to pay people fairly.   DBSquared brings a consistent process to value all job classifications and come up with a strong structure for base pay.    Once that is created, the HRsoft Compensation Planning solution lets employers use salary adjustments, merit increases and variable pay to reward employees based on a variety of performance, business and budget factors.   Having a strong base pay structure is a foundation of compensation planning.”

The partnership between DBSquared and HRsoft standardizes data for users of solutions from both companies.   The base pay structure developed in the DBSquared software can be transferred to the HRsoft COMPview solution for presentation to compensation planners and other managers for making further compensation decisions.   Analytics and management reporting of the data is critical for making strategic decisions about compensation.  Reporting supports compliance with the relevant fair pay and equitable pay regulations by identifying areas in need of attention and action.

About DBSquared

DBSquared is a nationally recognized company providing simplified HR technology that empowers our customers. We improve our customers’ return on investment by reducing employee turnover through the development of equitable and competitive base pay structures established with proven data-driven processes.  DBSquared’s SAAS solutions are continuously improving by way of recommendations from its customer users. Learn more at www.DBSquared.com.

About HRsoft

HRsoft supplies innovative Cloud-based compensation planning software solutions that automates the compensation planning process and workflow for employers.   This, in turn, helps businesses enhance employee engagement and retention.   Scalable and supported by award-winning client service, HRsoft enables organizations to manage their compensation planning process in a centralized, secure system.   Discover more at:   http://www.HRsoft.com.

—————————–

Download our free HR Guide to a Compliant, Equitable & Competitive Compensation program on the right or click below to contact us for a free demo!