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Q&A Forum

Are executive compensation fundamentals changing?

 

"Do you see any momentum for companies to change their comp plans to more heavily weighted towards revenue as the new revenue standard comes into play?"

This question was asked at a recent webinar, now available on-demand:

"Why Companies Need a Bookings Policy, and How to Create One"

Please add your thoughts about it below. Thanks!

Answers

Mike Murphy
Title: Chief Business Officer
Company: goTransverse
(Chief Business Officer, goTransverse) |

Depends on the industry. I have been seeing a trend moving away from revenue towards bookings as companies move towards the “as a service” offerings.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

I see the model changing for some industries. When we pay people a flat dollar amount to do X number of job duties, I see complacency set in and continuing to "do things because that's the way we've always done it" mentality. We need to give employees a goal to work towards, challenge their practices, get them to think outside the box. One way to do that is an incentive program. Give them some skin in the game so they don't just come to work punch the clock and go home. Real value comes from at least annually challenging processes, seeking innovative ideas from your team and seeking their input to drive results. If the entire organization understands how the company drives revenue and the effects of reducing expenses, everyone wins.

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