In Focus: Hiring, Firing, and Paying a CEO
This month we have been taking a deep-dive into hiring, firing, and paying the CEO. A CEO can make or break an organisation, therefore CEO recruitment and remuneration are two tasks that the board should approach judiciously. This month’s in focus will hopefully help you and your board understand the tricky world of CEO appointment, retention, and remuneration.
Recruiting a CEO
This article is a handy guide to hire / transition to a new Chief Executive in a not-for-profit or for-profit business and covers everything from receiving the current CEO’s resignation, through to embedding the new CEO into the organisation. Read more.
5 Essential Tips When Hiring a New CEO by MDDI
Searching for a new CEO is tough, but a thoughtful and timely action plan can make the process smooth while ensuring the ideal person is found. Read more.
Selecting a new chief executive officer is a critical decision that can have a large impact on a company’s future. Here are 10 principles for executives and directors to help you hire a new CEO. Read more.
Hiring a CEO: how important is industry experience?
There are powerful arguments for companies to excel in succession planning, with the ‘home grown’ CEO, on average, more likely to outperform an external appointment, cost less and deliver fewer surprises. On the flipside, appointing CEOs from outside the organisation can freshen executive thinking and strategy, and help capitalise on emerging market opportunities. Richard Perkins from Hayes Knight Adelaide shares his tips for boards when hiring a CEO. Read more.
A guide to setting your charity chief executive’s pay via The Guardian
Five principles to help boards ensure their CEO remuneration decisions are good for all stakeholders. Read what they are here.
Setting CEO remuneration by The Institute of Community Directors
There are no hard and fast rules to setting a salary package level, and there are certainly no simple tables for you to check. Some general principles, however, do apply at every point. Find out what they are here.
A Guide To CEO Compensation via Investopedia
Even though this article is written through the eyes of an investor, the guidelines shared for checking a company’s compensation program can help you evaluate your own compensation program, and consider ways to improve it in ways that are good for the business and good for stakeholders. Read more.
High CEO Pay Inspires Better Performance – Until It Doesn’t by Egan & Associates
Creating a larger differential between CEO pay and that of a typical worker can lead to better performance and lower company risk, according to a recent US study, but only up to a certain point. For this reason, it is important that organisations are comfortable with the level at which they set their executive pay. They may at times be more comfortable after external confirmation that their remuneration is well within the sweet spot noted within the research. Read more.
The Importance of CEO Compensation Plan Design by Longnecker and Associates
Given the increased attention to pay for performance, it is important for companies to understand that the key to successful compensation plans is not the amount of compensation. Rather, it is intent and design. Simply put: CEO pay should be designed to drive a company’s business strategy and create shareholder value. Read more.
Firing a CEO
CEOs with less than 5 years of experience are more likely than long-standing ones to be fired, so it’s going to happen all the time. But there are ways to do it, and ways not to. Here are some tips to help you to not have it backfire and/or come back to bite you in the a**. Read more.
Most companies perform no better—in terms of earnings or stock-price performance—after they dismiss their CEOs, than they did in the years leading up to the dismissals. Worse, the organisational disruption created by rushed firings—particularly the bypassing of normal succession processes—can leave companies with deep and lasting scars. Far from being a silver bullet, the replacement of a CEO often amounts to little more than a self-inflicted wound. Read more.
Succession planning is actually part of sound strategic planning and risk management. Strategic planning defines the direction of the organisation and risk management identifies and attempts to mitigate risk. Human capital, both current and future is an indispensable aspect of any such analysis and discussion. Read more.
What to pay your CEO? via PayScale
Here’s a little tool that may help you determine skill set and salary range. Use the interactive tool to get specific data based on different Australian cities, experience level, and skill set.
The Board’s Role in CEO Succession Planning
If the proverbial hit the fan tomorrow, would your organisation be able to continue at all, let alone function successfully? If the CEO (or equivalent person) were suddenly taken away from the business – either through sickness, injury, or death – would business continue ‘as usual’? Ensure you’ve got a solid succession plan with these simple steps.
NFP Executive Salaries, Attraction and Retention
CBB the Not4Profit People have released their annual Attraction & Retention: Not-for-Profit Executives study results. Their follow-up report contains heaps of information that will be most helpful and insightful to you as a business leader. The report highlights the study’s key findings and resultant strategies, including what they mean for your business. Download a free e-copy here.
Executive Compensation: Incentives, Performance, and Metrics via New York Stock Exchange Governance Services
In this video, Christina Medland, Partner, Meridian Compensation Partners, explains how to make sure compensation committees use the right metrics to reward the right performance, and the shares the four-lenses approach that you can use to ensure compensation/remuneration committees have the right amount of stretch in incentive plans. Watch now.
Setting Executive Compensation via Harvard Executive Education via Harvard Business School Executive Education
“… If companies want to be different and produce above-average results, they need to attract and retain employees who are anything but average.” That’s just a small insight into some of V.G. Narayanan’s outside-of-the-box-thinking when it comes to executive compensation. Read more of V.G’s crazy ideas here.