We Charity: The CEO practice that leaves everyone more secure

We Charity is a leading executive search and human capital management firm that helps businesses grow by improving the culture that impacts employees and attract and retain top talent. It’s been amazing to help thousands of organizations make the leap from small, family-owned businesses to large, global enterprises.

Nearly a decade ago, we launched a global initiative that helped our clients learn how to reduce their total cost of executive compensation. This trend has since gained momentum, and companies are no longer afraid to ask how to reduce compensation over time while continuing to reward the right employees with equity grants. We have also been taking a close look at the effect of executive compensation on the brand and the overall success of a company.

Executive compensation matters. The link between the perception of fair compensation and an organization’s reputation in the marketplace is well-documented. It’s also critical that companies be transparent about where they are taking the next step in compensation. Even small firms that are small on account of executive compensation need to look at how best to balance the needs of their employees and align that compensation with the long-term performance of the organization.

This is particularly true for organizations in the tech sector. Many tech companies have made tremendous strides when it comes to executive compensation practices, and you don’t need to look too far in the sector to find companies that offer competitive compensation. Yet, there are others in the sector that are still not aligned with the principles of the C-Suite. And without a market-driven basis, companies need to ensure that compensation is fair, effective and transparent.

Related Image Expand / Contract April Mullen, global head of consulting services, with We Charity’s staff. (Photo: We Charity)

In today’s market, capital is not in short supply, and on a global basis, there is a significant amount of demand for quality executive talent. The talent gap is wide, and although companies are increasingly compensating their leaders more appropriately, not all of them are following the right practices.

Furthermore, small businesses are under pressure to compete against larger organizations in just about every area. To help struggling small companies align compensation with performance, We Charity offers a variety of services including executive consulting and leadership assessment. The recruiting model is supported by a competitive cost to hire, and the feedback process lets companies begin to understand why compensation is not yielding the results they desire.

As a result of its work, We Charity was fortunate to earn the highest possible score in the Economist Intelligence Unit’s 2018 Executive Pay Caps Survey, whose results were based on a sample of C-Suite CEOs globally. With an overall score of 87, it scored higher than the median company (73) and nearly 7 percentage points higher than the bottom company (26). That’s significant because CEO pay is increasingly measured in terms of KPIs and EBITDA (earnings before interest, taxes, depreciation and amortization), and the longer firms hold onto managers and continue to pay them fairly, the better the chance that those companies will generate shareholder value in the long term.

Keep the ball rolling. The questions companies need to ask are actually quite simple, but successful compensation practices like those at We Charity require commitment and attention. They also have a critical role to play in the success of the organization.

April Mullen is global head of consulting services at We Charity, where she leads the executive search services team and a team of executive compensation experts.

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