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.
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 the Dodd-Frank Act legislation after the 2008 Financial Crisis, the inclusion of shareholder SOP voting was driven by bipartisan Congressional support to “control executive compensation…” at corporations. In 2009, a former SEC chief accountant said, “Executive compensation at this point in time has gotten woefully out of hand… The time to adopt ‘say on pay’ type legislation is certainly past due.” Politicians, regulators, and some institutional shareholders clearly thought that, “The impetus for passage of Dodd-Frank’s say-on-pay requirement in 2011 focused on remedying ‘excessive’ CEO pay.” 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 →
The number of methods for defining “CEO pay” when analyzing executive compensation continues to grow. From total pay suggested by the summary compensation table to the definitions used by Glass Lewis or Institutional Shareholder Services (ISS) in their proxy review reports, there is no universal standard for measuring pay, especially in comparison to performance. Continue reading →
The past year has seen extensive criticism of share buybacks as an example of “corporate short-termism” within the business press, academic literature, and political community. The critics of share buybacks claim that corporate managers, motivated by flawed executive incentive plans (stock options, bonus plans based on EPS, etc.) and supported by complacent boards, behave myopically and undertake value-destroying buybacks to mechanically increase their own reward. 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.