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Incentive Pay Plans

According to the Mercer Asia Executive Remuneration Snapshot Survey, approximately 30-40% of an executive’s total pay package is linked to variable pay regardless of the type of organization.

With increased scrutiny of executive compensation and greater transparency attributable to enhanced disclosure requirements, having a pay-for-performance compensation philosophy is practically a must for U.S. companies.

The troubled economy is causing fundamental shifts in executive compensation bonus and equity-based incentives plans, according to a November 2008 report by pay consultancy DolmatConnell & Partners.

The end of the year brings bonus and performance review discussions for many employees.

Decreased earnings and falling stock prices have shredded the value in some companies’ annual incentive and long-term incentive plans, according to a survey by Deloitte Consulting LLP.

CHICAGO—It’s the economy, said Sharon K. Koss, SPHR, consultant and author of Solving the Compensation Puzzle (SHRM, 2007), during her June 21, 2008 workshop on “Compensation Basics,” held here.