Pay Governance LLC is an independent firm that serves as a trusted advisor on executive compensation matters.
Our work helps to ensure that our clients' executive rewards programs are strongly aligned with performance and
supportive of appropriate corporate governance practices.
Ira T. Kay, a Managing Partner at Pay Governance, is one of the nation's foremost experts on executive compensation. He works closely with the boards and management to help them develop executive compensation programs that increase shareholder value. His clients include premier US and global corporations ranging across various industries, including telecommunications, financial services, retail, defense, technology, consulting, insurance, business services, consumer products, media, food, transportation, among others.
Prior to becoming a Managing Partner at Pay Governance, Ira served as the global director of Watson Wyatt's Executive Compensation practice for 16 years.
Ira writes and speaks regularly on executive compensation issues. His most recent co-authored book, "Myths and Realities of Executive Compensation", documents the realities of executive pay in the United States and the forces that have shaped pay in recent years. He is also the author of "The Human Capital Edge, CEO Pay and Shareholder Value: Helping the U.S. Win the Global Economic War", and "Value at the Top: Solutions to the Executive Compensation Crisis." Ira has presented analysis of executive compensation issues before the Federal Reserve Board, the S.E.C., the F.A.S.B. and a U.S. Senate subcommittee. He is often quoted in The Wall Street Journal, New York Times, Forbes, The Economist, and other leading publications. His articles have been published in the Harvard Business Review and the McKinsey Quarterly.
Ira holds a B.S. in Industrial and Labor Relations from Cornell University and a Ph.D. in economics from Wayne State University.
Incentive plans lie at the heart of the executive pay program, driving and rewarding business strategy execution. This approach has brought great economic success to the clear majority of companies. The typical annual incentive plan and long-term incentive (LTI) mix of multiple award types can capture most regular core performance metrics. A more contemporary design approach may provide significant focus and urgency regarding a company’s strategic transformation, shifting business strategy, or competitive advantage in attracting and retaining talent. Continue reading →
In our study of 389 S&P 500 companies, the median CEO pay level is $12.1 million, consistent with many other studies. The median of the “median employee pay” level, as disclosed in the ratio section of the proxies, is $70,129. This latter value has surprised many observers, as it is much higher than expected and — more importantly — 39% higher than the average U.S. private sector salary of $50,620 (142 million employees). This employee pay level was previously unknown. Continue reading →
Last year, two articles in the Wall Street Journal and Harvard Business Review criticized the overall CEO pay model at U.S. companies. The authors of both articles, Robert Pozen and S. P. Kothari, link their criticisms to shortfalls in executive compensation governance (e.g., poor disclosure, misleading metrics, and selecting inappropriate peer groups) that have been allowed and/or encouraged by Board Compensation Committees. In this article, we address these critiques. Continue reading →
Say on Pay (SOP) and shareholder advisor vote recommendations have caused a dramatic increase in the use of relative total shareholder return (TSR) as a long-term incentive (LTI) plan performance metric. Continue reading →
In today’s environment, with annual Say on Pay (SOP) votes, intense external scrutiny and the need to strongly align pay with performance, it is increasingly important for companies to be confident in their executive pay program. The foundation of a sound executive pay program is built on the company’s business strategy and talent needs, which, collectively, must be achieved in order to create shareholder value. Continue reading →
At a recent Compensation Committee meeting, a director remarked, “As we discuss our CEO’s target compensation for next year, we need to remember that there is an ongoing debate about income inequality.” Income inequality and executive compensation are two of the most controversial issues in modern American economic and political discourse. The forthcoming mandated disclosure of the CEO pay ratio will link these two issues directly in the boardroom.
How much of the increase in inequality has been caused by CEO pay, and is this a failure of corporate governance?
This Viewpoint will provide some insights for directors and others into the answers to these questions in the context of the SEC’s mandated disclosure of the ratio of CEO to median employee pay. Continue reading →
Our article was recently picked up by World at Work. Visit this link to be redirected to log in to their site. Our article has also been picked up by Harvard Law School Forum on Corporate Governance and Financial Regulation. … Continue reading →
By Ira Kay, Lane Ringlee, Bentham Stradley, Brian Lane, and Blaine Martin Partners Aubrey Bout Chris Carstens John R. Ellerman John D. England R. David Fitt Patrick Haggerty Jeffrey W. Joyce Ira T. Kay Donald S. Kokoskie Diane Lerner … Continue reading →
The Harvard Business Review [HBR] recently published an article, “Stop Paying Executives for Performance,” by Professor Dan Cable and Associate Professor Freek Vermeulen of the London Business School. The authors present arguments and analysis that incentives do not motivate executives to improve corporate performance. In fact, they argue that incentives might damage performance. Continue reading →
A new Equilar report featuring commentary from Pay Governance and Donnelley Financial Solutions analyzes the compensation discussion and analysis (CD&A) section of S&P 100 proxy statements over the last five years. With the average CD&A reaching nearly 10,000 words, the report revealed key strategies in how companies design and communicate pay practices by using alternative pay graphs, checklists and other visualizations that help draw investors to the most important information.
To be redirected to Equilar and download a copy of this important report, click here.
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October 4, 2016
Pay Governance Adds New West Coast Partner
Matt Quarles has joined the firm as a Partner. In this role, Quarles is responsible for working with clients across industries on a wide range of executive compensation issues. He will be based in Los Angeles and has nearly 20 years experience in the executive compensation consulting industry.
Pay Energy®, a new proprietary assessment tool developed by Pay Governance
Pay Energy®, a new proprietary assessment tool developed by Pay Governance LLC, helps companies consider the “drive, discipline and speed” inherent in current programs and in alternative designs that may be evaluated.
“The fundamental philosophy of executive compensation is to ‘attract, retain and motivate’ a talented management team. So it’s concerning when you hear incentive awards are just put in desk drawers until plans mature,” said Pay Governance managing partner John England.