If you're looking to hire an executive in 2015, it's critical to stay abreast of the latest compensation trends. This year, according to Tyler Ridgeway of Human Capital Resources, many companies are discovering that they are in good financial shape again after having survived a recession. As a result, they are now able to think about increasing compensation for their current employees or bringing new, higher-salaried executives on board. However, to attract the kind of people you're looking for and truly build your company, you have to know how to set up compensation in a way that motivates top talent.
Increasingly, executive compensation is coming in forms that reward the performance and growth the professionals bring to the company, rather than incentives being guaranteed no matter what. One example is the rise in the use of stock appreciation bonuses, which reward executives for the work they've done to increase the value of the company's stock. Executives who are compensated this way don't actually own equity in the company but reap the benefits of whatever value increases they bring to the company.
In today's competitive talent market, however, you will also have to entice candidates with hefty base salaries. Combine these with performance-based bonuses and you have a recipe for success. According to Ridgeway, "One way to ensure your new hire will have some 'skin in the game' is by offering a package with a very competitive salary along with a strong performance-based bonus and upside compensation." In other words, a strong salary plus the opportunity to earn more is a more effective motivator than a weaker salary and guaranteed stock options and bonuses.
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