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Tinkering With Employee Compensation Plans to Remain Competitive

Tinkering With Employee Compensation Plans to Remain Competitive

With many companies being forced to limit stock options due to FASB regulations, chief financial officers need to get creative when it comes to keeping their employee compensation plans competitive.

According to Financial Executives International, some of the most popular strategies being employed by financial bosses include offering performance shares if targets are met, giving cash bonuses and expanding deferred compensation plans through more significant contributions to retirement plans.

One other means of shifting around the compensation plans of employees is through offering restricted stock. According to the publication, this involves actual shares being given to employees subject to a vesting period of three to five years, with the shares being worth as much as the stock itself.

While such an option has typically been relegated to the company's most senior executives, Financial Executives International reports that restricted stock is a way to reward performance and loyalty of staff members during booming and struggling periods for the firm.

According to, appealing to and bringing in the right candidates goes a long way towards retaining quality staff members, as viewing the candidate's long-term career goals can give bosses an idea of whether the person can ultimately climb the corporate ladder within the firm.