At a Glance
“Company culture/team atmosphere."
“Flexible hours, ability to work from home."
“Poorly structured formulaic bonus program.”
"Small HR only firm"
"Good, HR focused."
About Pearl Meyer & Partners, LLC
For almost three decades, Pearl Meyer has provided compensation consulting services and compensation survey data to clients ranging from Fortune 500s to emerging, high-growth companies and not-for-profits. At a time when executive pay is under the regulatory microscope and shareholders are demanding more value for their money, Pearl Meyer provides a comprehensive approach to compensation planning. The firm's 100-plus professionals work with boards and senior management to create executive reward programs that align with the company's business and leadership strategy.
All of the firm's core practices deal with executive compensation, with consulting services that range from compensation strategy design to implementation and communication of pay programs. Capabilities include helping organizations develop their compensation philosophy and guiding principles, salary programs, annual short-term and long-term incentives, value creation and performance measurement, contracts, severance agreements, change-in-control arrangements, equity programs, competitive intelligence and compensation surveys. The firm also conducts extensive research, ensuring that it can serve as an up-to-date resource with trustworthy benchmarking.
Its compensation survey practice publishes managed and custom surveys. These are broad studies that provide compensation and total rewards data for senior management, upper-level executives, and managers, and on segments of an employee population such as recent college graduates or customer-focused positions. The firm partners with industry associations and groups to run managed surveys that report pay data for specialized industries or geographic areas and is hired for custom surveys that tackle unique employee population segments with specific credentials or backgrounds that make benchmarking difficult.
Winding Path to Pearl Meyer
Pearl Meyer & Partners was founded in 1989 and acquired in 2000 by Clark Consulting. Seven years later, in March 2007, AEGON N.V., a Dutch life insurance and pension group, bought out Clark Consulting. Under a special asset exchange agreement between Clark Consulting and AEGON, Pearl Meyer & Partners and other divisions that had been part of Clark Consulting were sold to Clark & Wamberg, LLC, an investor group created to absorb the former Clark Consulting. In 2010, the Company was spun off from Clark & Wamberg, LLC and is now owned by BB Shared Services, LLC and certain management owners. David N. Swinford has been the firm's CEO and President since 2007. In the fall of 2015, the firm re-branded and shortened its name to Pearl Meyer. In 2017, the firm acquired Main Data Group.
A Recognized Resource
A longtime provider of compensation information and services, industry professionals have come to rely on Pearl Meyer for its expertise and advice, which the firm offers via research reports, articles, videos, and white papers. "As We See It" pieces offer perspective and opinion on industry trends and timely client alerts offer technical advice on compensation developments in the disclosure, tax, and accounting areas.
Pearl Meyer consultants regularly participate in industry events and conferences, and are frequently quoted in industry publications such as Agenda, Directorship, Workspan, Compliance Week, and CFO; and in mainstream media, including Bloomberg, Reuters, the Wall Street Journal, NPR, The Washington Post, Entrepreneur, The Sunday Times, and BBC Radio.
IN THE NEWS
Yes, Your Compensation Committee Should Talk about ESG Performance Measures
ESG (environmental, social and governance) issues are in the spotlight. There is a growing consensus among investors that good ESG practices correlate with investor returns. This has provided proxy advisors with a mandate to spend more time and energy on attempting to measure and score how well companies are actually doing with respect to their ESG practices (a Sisyphean task depending on company stage and sector).
At any rate, it seems logical to ask “if investors and proxy advisors believe ESG initiatives can unlock shareholder value, ought executive incentives be tied to these initiatives?”
We are curious to understand the extent to which this issue is driving the agenda for compensation committees. In other words, will committees be spending time this year reviewing the appropriateness of ESG measures for inclusion in their executive compensation programs?
Fortunately, our Quick Poll series Setting the Compensation Committee Agenda is designed to challenge and explore whether items that appear to be capturing public attention—for good or ill—translate into actual time spent in review and discussion at compensation committee meetings. This summer we asked participants a simple question: Will your compensation committee review the appropriateness of environmental, social, and governance (ESG) measures for your executive incentive plans this year? (Read more…)
Boards Beware: The Unexpected Bias in ISS’ Guidelines for Director Pay
There is a possible director compensation issue that we want to make companies aware of and some early data analysis indicates the issue may be even more complicated than we anticipated.
In the fall of 2017, Institutional Shareholder Services (ISS) proposed enhancements to their U.S. Voting policies to include potential “adverse vote recommendations for board committee members who are responsible for approving/setting [non-employee director] compensation when there is a pattern (i.e. two or more consecutive years) of excessive [non-employee director] pay magnitude without a compelling rationale or other mitigating factors.”
This proposed enhancement was codified into their 2018 voting policy document. Voting policy FAQs issued for the new policy year provide some additional clarity, suggesting ISS may identify outliers based on a comparison of company “individual non-employee director pay totals to the median of all non-employee directors at companies in the same index and industry.” Further, they effectively define “excessive” as compensation figures above the top 5% of all comparable directors.
While boards were given a pass in 2018, the policy will fully go into effect for 2019. With that as a backdrop, Pearl Meyer worked with Main Data Group to analyze a broad set of director compensation information to try and better understand where companies may be at risk.
Our analysis shows some potentially surprising results that may catch some companies off guard. While we believe it’s important to carefully calibrate your board’s director compensation philosophy and the corresponding pay strategy—and be able to articulate clearly why it best serves the company—you should be aware of some areas that could raise immediate red flags with ISS. (Read more…)
Think the Tax Gross-Up is Obsolete? Not Necessarily.
We’re on the record with others in thinking that excise tax gross-up provisions in new agreements are a pretty rare occurrence. In fact, for the most part, we have been under the distinct impression that these types of provisions have been on the road to extinction. Since the late 1990s and early 2000s, we’ve watched companies, under pressure from shareholders and their advisors, eliminate these provisions from legacy change-in-control (“CIC”) and severance agreements and vow not to include the entitlements in any new agreements going forward. But in our work advising companies on pending transactions and reviewing public “say-on-golden parachute” disclosures, we stumbled upon a minority of companies adopting excise tax gross-up provisions shortly before a transaction’s close. And while shareholders seem to have expressed opposition to the gross-up additions in the say-on-golden parachute vote, those same shareholders overwhelmingly supported the vote to approve the associated transactions. (Read more…)
Pre-IPO Companies: Tailor Pay Position to Pay Purpose
Compensation, whether denominated in cash or equity, is a limited resource. Since each pay decision has an opportunity cost (i.e., the quantum of compensation allocated to executive A reduces the amount available for executive B), it is useful to establish rules of the road for how this limited resource will be allocated.
Pre-IPO companies may benefit from conceptually bifurcating the decision-making process and emphasizing different criteria when considering annual rates of pay (typically cash) vs. carried interest from equity position.
External market data is a useful starting point, but variation in competitive positioning relative to this market data is expected, and should reflect considerations specific both to the individual (executive’s tenure, specific role, responsibilities, performance, and internal equity vs. other executives) and company (company performance with respect to growth, profitability and/or returns, as well as affordability concerns).
When a company is fast-growing and profitable, an overall across-the-board higher competitive positioning may be warranted. For example, the executive team as a group may have base salaries or target total cash (base salary plus target annual bonus) positioned between the 60th and 75th percentiles relative to other pre-IPO companies of similar funding stage or capital raised.
The following table is a sample tool providing general guidelines for tailoring targeted competitive position to assessments of executive performance and potential. (Read more…)
The Push to Advance Pay Parity
With the maelstrom of social issues coming to a head in 2017, gender pay inequality once again is at the forefront, although the issue has been discussed for decades and remains a global social challenge. As human resources and compensation professionals, we cannot forget that it also is a legal issue, one that “depresses wages and living standards for employees ... prevents the maximum utilization of the available labor resources … burdens commerce and the free flow of goods in commerce, and constitutes an unfair method of competition,” according to the Equal Pay Act of 1963.
While there have been numerous attempts at the federal level to enact laws that would improve or even alleviate pay inequality (see “A Brief History of Federal Equal Pay Legislation”), women today make only 80 cents to every dollar made by men, based on a U.S. national average. This statistic prevails, even though women make up nearly half of the employed U.S. labor force, enroll and graduate from higher education institutions at rates higher than men, and make a majority of household buying decisions. Why does this inconsistency still exist when there are rules to prevent and prohibit it? Much of the answer may lie in the fact that grievances are difficult to prove, and data can be scarce or inconsistent. (Read more…)
The current business climate—and that of the foreseeable future—points to an increase in organizational transparency and accountability. Stakeholders have found their voice. Major shareholders, institutional investors, activists, employees, pension funds, labor unions, and the general public are all becoming more outspoken about their distinct and sometimes conflicting interests in public companies.
Executive compensation per se is not always a top agenda item for these various stakeholders. That said, they look at disclosures around executive pay and will often infer corporate priorities based on what’s said—and what isn’t. Here, we outline guidance for boards about how to communicate the link between their pay programs and their business strategy and how to do so as clearly and openly as possible. And should companies become embroiled in a situation that calls for a defending response, we suggest how to meet that challenge and how to benefit in the future from lessons learned. (Read more…)
570 Lexington Avenue
New York, NY 10022
Phone: (212) 644-2300
Employer Type: Private
President & CEO: David N. Swinford
2018 Employees (All Locations): 164
New York, NY (HQ)
Los Angeles, CA
San Jose, CA
Board of Directors Compensation
Broad-Based Employee Compensation