Trends in Compensation Packages

The era of high guaranteed Partner salaries and time-and-materials billing is fading fast in Professional Services. The idea of paying $1M+ salaries to Partners delivering modest revenue is becoming harder and harder to defend. Senior leaders exiting the large firms are finding themselves in unfamiliar territory. The market now demands that they take on real client risk, link their compensation to outcomes—not effort—and focus on building long-term enterprise value rather than stacking billable hours. The firms that are thriving today have already made the shift. Their Partners don’t just turn up—they commit. They build. They invest. And they share in the upside. Lower base salaries, higher variable comp tied to performance, and above all, equity ownership as the central source of wealth creation. Clients expect the same. They’re done paying for time—they want results. Outcome-based pricing isn’t a trend—it’s the new standard. And it’s reshaping the entire industry. We’re seeing the rise of a new breed of Partner: entrepreneurial, hands-on, and now empowered by Agentic AI to deliver more value, faster and leaner than ever before. What’s fading? The traditional leverage model built on layers of junior staff and local hiring. That approach is rapidly losing relevance. What’s emerging is sharper, more scalable, and fundamentally aligned with client success. The future belongs to those who create value—not just those who track time.

3 things every People leader should negotiate before accepting their next offer. At the executive level, negotiating a smart package is about more than getting a market competitive salary. It’s about aligning on a set of terms that incentivize you to drive business success while providing a safety net for you and the company both if things don’t work out. Here are 3 things every People leader should ask about — and how to do so effectively — before accepting their next role. Equity While nothing is ever guaranteed, the right equity package can make you a millionaire overnight. If your company makes it big, you don’t want to be kicking yourself over losing out on a smart equity package. Explore guarantees that protect your equity while incentivizing you to optimize for the company’s success: - Single or Double Trigger Accelerations: To protect your stock if the company gets sold before you finish vesting - Extended Exercise Window: To buy yourself more time to exercise vested options post-departure  - Equity Top Ups: To protect against dilution during funding rounds Bonus Smart bonus plans don’t just focus on the dollar amount awarded, but the structure they’re built around. Consider: - Guarantee language to cover periods of approved leave, especially parental leave - Signing bonus — especially if you’re walking away from a hefty bonus at your current company and/or taking a big risk switching to an earlier stage startup - Annual bonuses tied to business metrics — to round out your total comp package while signaling that you prioritize business success over team-specific metrics Exit Plan Think of it like a prenup. You’re going into this with a confident outlook, but if things don’t work out, you want to have a smart plan in place *before* things get messy — not after — to ensure a smooth and mutually beneficial transition. Ask about: - Guaranteed COBRA coverage - Guaranteed salary payouts  - Guaranteed transition period where you stay on payroll as an advisor or consultant vs an abrupt departure — better for optics and enables smoother handoffs As with all things, the key to effective negotiation is being thoughtful in your framing. You want to come across as business-savvy, not out of touch. It’s the difference between pushing for an unrealistic bonus structure that would put the company financials at risk and pushing for a bonus structure that hinges upon the company’s ARR goals — you only win if the company wins. And remember: These discussions shouldn’t stop at the offer letter. Roles evolve, expectations expand, and company realities change. Smart execs revisit these terms over time. Want to learn more about what to negotiate, how to frame your asks, and what is (and isn’t) realistic depending on company size, stage, and industry? Check out my negotiation cheat sheet below. 👇 #hr #people #compensation

Working hours, working age, minimum wage, and many other workforce considerations shift and evolve to fit the times and social sentiments. Before the Industrial Revolution, children labored along with their families. And in a pooled effort, there was no question of protecting minimum wage. However, this trend continued during the Industrial Revolution. It became exploitative and soul-crushing versus uplifting in the cause of a family laboring together. Hence laws governing legal age, safety, minimum wage, etc came into being. With the rise of the gig economy, moonlighting, hybrid work models, and more — employee needs have shifted. How do we curate concrete benefits that genuinely resonate with today’s and tomorrow’s workforce? Bonuses, vouchers, overtime pay, free food, etc., are an old thing. Today’s employees expect workplaces to share their values and causes, champion their personal constraints, and offer better professional growth. Benefits must align with their evolving values, life stages, and priorities. Once considered an optional add-on, mental health resources are now a core expectation. For instance, recognizing the role of fathers in caregiving, many companies now offer extended paternity leave. And caregiving benefits include elder care and flexible pet care options. Did you know Spotify offers six months of parental leave and covers costs for fertility assistance, including egg freezing? Then, Salesforce’s Wellness Reimbursement Program offers employees up to $1,000 annually for fitness classes, mental health services, nutrition consultations and more.  PwC has implemented an interesting student loan repayment program: It contributes $1,200 annually toward employees’ student loans. This is a game-changer for younger employees burdened by debt. I am sure many more organizations are offering customised benefits and refreshing them every few years. According to a recent LinkedIn Workplace Report, over 60% of employees prioritize flexibility and work-life balance when deciding whether to join or stay with a company. Similarly, SHRM data reveals that organizations offering personalized benefits experience 41% higher retention rates than those sticking to conventional models. The future workplace will thrive on customization, inclusivity, and addressing needs across the employee's life stage. What benefits are game changers for you? #career #growth #leadership #work #future

Most leaders I coach are proud of their comp plan. They’ve spent hours tweaking it to make it competitive, fair, and profitable. But here’s the hard truth: No one cares about your comp grid. What they care about is what it means for THEM. I see it over and over, leaders hand over a spreadsheet or flash a single slide with the payout structure and say, “Look how great this is!” Then they wonder why top performers aren’t jumping at the opportunity. The problem? You’re showing the map, but you’re not helping them see the destination. Vision isn’t just a 10-year BHAG. Vision is painting a clear picture of what success looks like inside your model, today, tomorrow, and at the next level. Here’s the simple framework I teach every leader I work with: Always present your compensation model through THREE real-world examples: The Average Producer Someone doing solid, consistent volume, maybe hitting their annual targets comfortably. Show exactly what they’d earn with you, month by month. Make it relatable for the majority of people you’re talking to. The Good Producer A strong, experienced team member closing above-average results. Illustrate the meaningful bump they’d see by joining your team. This is where most of your recruiting targets live, prove the move makes financial sense. The Great Producer The top-tier rockstar crushing goals and pushing the ceiling. Show the real upside. This isn’t fantasy, this is the path to life-changing income. When they see it clearly, they start imagining themselves thriving in your world. Don’t just list percentages or tiers. Walk them through actual scenarios: “Here’s what an average performer like Sarah would earn in her first year with us…” “Here’s what a solid contributor like Mike made last year elsewhere vs. what he’d make here…” “And here’s what a top performer like Jessica could do in year two once she’s fully ramped…” When you do this, something powerful happens: You’re no longer selling a comp plan. You’re casting a vision for their future. You’re helping them see themselves succeeding inside your company. I’ve watched this one shift turn “We’ll think about it” into “When can I start?” Leaders: Next time you’re in a recruiting conversation or presenting to your current team, try the 3 example rule.  It works in lots of other scenarios.  Your comp model isn’t just numbers, it’s a vision-casting tool.

How do Australia's largest companies' CEOs get paid? Australian Council of Superannuation Investors annual study on ASX200 CEOs remuneration highlighted flattening of median pay and reduction in average CEO pay to average earnings of the Australian worker, over the past decade. ➡️ Trend of 'golden parachutes' is smaller. Termination payments in the ASX100 fell to $8.38 million, their lowest level in 15 years, and average payout per CEO fell from FY23 ➡️ Interestingly, the highest paid CEO was for the ASX101-200 cohort, with realised pay of $39.55m. Yet median CEO pay in ASX100 was $4.15m and has remained relatively flat since FY14 ➡️ Bonuses paid just under 66% of maximum - its second lowest level in the last 10 years, suggesting hurdles for short-term incentives are reasonably challenging. Yet, it's still rare for CEOs to miss out on bonuses. Further insights 💡 Investors save on termination costs, while companies can direct funds to shareholder value 💡 Institutional investors and governance advisors have been playing a role in keeping boards accountable for performance-linked pay 💡 Bonus relative to maximum figure indicates short-term incentives are reasonably challenging Overall, pleasing trends from the report but still room for improvement in our listed companies. The outcome of bonuses, and proportion of 'at-risk' pay and incorporation of non-financial measures will be important leading to the AGM season later this year. Investors will also be monitoring leve of malus or forfeited pay from significantly poor ESG performance. Important and insightful reading for Australian equity investors and shareholders.

𝐋𝐞𝐚𝐝𝐞𝐫𝐬 𝐚𝐫𝐞 𝐞𝐦𝐛𝐫𝐚𝐜𝐢𝐧𝐠 𝐎𝐧𝐞‑𝐭𝐢𝐦𝐞 𝐚𝐰𝐚𝐫𝐝𝐬 𝐚𝐧𝐝 𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞‑𝐛𝐚𝐬𝐞𝐝 𝐢𝐧𝐜𝐞𝐧𝐭𝐢𝐯𝐞𝐬 𝐭𝐨 𝐬𝐭𝐚𝐲 𝐜𝐨𝐦𝐩𝐞𝐭𝐢𝐭𝐢𝐯𝐞 𝐢𝐧 𝐚𝐧 𝐞𝐫𝐚 𝐨𝐟 𝐞𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐩𝐫𝐞𝐬𝐬𝐮𝐫𝐞 ! 🏆 From tenure to performance — Organizations are re‑engineering pay structures, shifting focus so peak performance is what drives rewards, not just time served. 📊 Beyond the CEO lens — Traditional CEO benchmarking is being challenged, with a broader emphasis on leadership‑wide pay practices. 🎯 Special awards on the rise — More companies are turning to one‑time or special awards for executives, but steering clear of “moonshot” mega‑grants with near‑impossible hurdles. 📉 Rethinking rTSR — Many leaders feel relative total shareholder return metrics fail to reflect true company performance. Executive rewards are entering a more measured, performance‑aligned era — balancing competitiveness, fairness, and realism in a shifting market, according to a new interesting research published by Korn Ferry using data from 3,880 HR professionals including rewards practitioners, HR business partners, and HR leaders, in 132 countries. ☝️ 𝙈𝙮 𝙥𝙚𝙧𝙨𝙤𝙣𝙖𝙡 𝙫𝙞𝙚𝙬: I see these findings as a powerful reminder that stability can coexist with uncertainty. Even in a climate shaped by political and economic headwinds, business, employment, and reward prospects remain resilient for a majority of companies. What stands out to me most is the insight on long‑term incentives (LTI); their enduring primacy, coupled with evolving designs that integrate non‑financial, strategic, and qualitative metrics, signals a thoughtful shift in how performance is defined and rewarded. Looking ahead, the global forecast for next year points to salary increases across much of the workforce — a sign of ongoing commitment to talent despite the pressures leaders face. My recommendations 🌟 𝐅𝐨𝐫 𝐨𝐫𝐠𝐚𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧𝐬: ➡️ Double down on LTI strategy — ensure long‑term incentives reflect both financial and non‑financial performance measures to drive sustainable value. ➡️ Communicate transparently — clearly share the “why” behind pay decisions to strengthen trust and engagement. 🌟𝐅𝐨𝐫 𝐫𝐞𝐜𝐫𝐮𝐢𝐭𝐞𝐫𝐬: ➡️ Highlight stability — use the forecasted global salary increases and headcount resilience as a selling point to attract top talent. ➡️ Understand shifting rewards — position performance‑linked pay and modernized LTI designs as part of the employer value proposition. 🙏Thank you Korn Ferry researchers team for sharing these insightful findings: Todd McGovern Tom Mcmullen 🔑 How are you rethinking reward strategy to balance stability and innovation in today’s climate? #ExecutiveCompensation #RewardStrategy #SalaryTrends #PayForPerformance

Early on in my HR career I had no idea that being able to own & manage compensation was like a superpower. It truly earns that executive seat when you're talking the same language. But in those earlier days, I built pay practices off compensation reports like everyone else.   In hindsight, it was crazy.   The funniest part was, the companies I was copying were copying the same spreadsheet...   Later in my career it dawned on me: if you pay the same as everyone else, you'll get the same results.   Duh.   If you're a Head of People, and trying to be seen as more commercial... then do this and stop letting your companies largest investment be dictated by an anonymised spreadsheet.   First up:   One of the hardest truths to accept in compensation Your pay should attract the right people, and repel the wrong ones.   To do this, your approach needs to be 'market informed', not 'market led'.   A market-led approach: - Outsources judgment calls that YOU should be making. - Budgets for pay increases based on everyones else, not what your company needs. - Can't explain how it serve the business' goals.   I’ve said this a bunch of times: let data inform, not decide.   Here’s the switch: Be market‑informed.   Start with your business model and goals, then choose your place in the market — on purpose: - Define your posture (lead, meet, or lag) by function, not company‑wide. - Tie bands to value‑creation (MRR, gross margin, payback), not vibes. - Pre‑commit walk‑away points for offers; exceptions require a written business case. - Budget equity by cohort and outcome, not by peer FOMO. - Pressure‑test affordability: revenue per FTE and unit economics before approval.   This all gets unpacked in a new article (featuring yours truly and my friends at Ravio) — How to use market pricing for compensation: Market-driven vs market-informed approaches.   https://bit.ly/3JXMEEa   Comp is a strategic choice.   You should be using the market as a map, not a steering wheel.   Have you seen companies differentiate their approach to pay?

Compensation scales best when the logic is explicit and consistent. The teams that run smooth cycles don’t rely on judgment calls; they standardize the math. Here are a few structures we see mature comp orgs codify early: First, see how Pequity lets you run any compensation logic you need: https://lnkd.in/gNYXp_8x 𝟭) 𝗔𝗻𝗰𝗵𝗼𝗿 𝗱𝗲𝗰𝗶𝘀𝗶𝗼𝗻𝘀 𝘁𝗼 𝗰𝗼𝗺𝗽𝗮-𝗿𝗮𝘁𝗶𝗼    Compa = Pay ÷ Band Midpoint   Use it to guide actions and prioritization:  • lower compa → correction or investment  • mid band → standard merit  • higher compa → smaller base increases, more equity or lump sum   One metric. Consistent logic across every team.   𝟮) 𝗗𝗿𝗶𝘃𝗲 𝗺𝗲𝗿𝗶𝘁 𝘄𝗶𝘁𝗵 𝘁𝘄𝗼 𝗶𝗻𝗽𝘂𝘁𝘀 𝗼𝗻𝗹𝘆    Performance × Position in band   Example:  High performance + lower compa → larger increases  High performance + higher compa → smaller increases  Lower performance → minimal or no increases   Simple merit grid > manager intuition.   𝟯) 𝗕𝘂𝗶𝗹𝗱 𝗴𝗲𝗼 𝗽𝗮𝘆 𝗳𝗿𝗼𝗺 𝗰𝗼𝘀𝘁-𝗼𝗳-𝗹𝗮𝗯𝗼𝗿 𝘁𝗶𝗲𝗿𝘀   Benchmark roles to surveys. Pick an anchor geo and compare your other geos to that. Group locations into 3–5 tiers based on similar pay (e.g. within 5% of one another).   Then apply: Pay = Band × Geo factor One band structure. Tiered multipliers. Easy to maintain at scale.   𝟰) 𝗕𝘂𝗱𝗴𝗲𝘁 𝗯𝗼𝘁𝘁𝗼𝗺𝘀-𝘂𝗽 𝗳𝗶𝗿𝘀𝘁    Model increases per employee using:  • compa-ratio  • performance  • market position  • eligibility rules   Roll those numbers up to form the team budget. After that, managers can redistribute within guardrails.   Algorithm first. Discretion second.   𝟱) 𝗗𝗲𝗳𝗶𝗻𝗲 𝗴𝘂𝗮𝗿𝗱𝗿𝗮𝗶𝗹𝘀 𝘂𝗽𝗳𝗿𝗼𝗻𝘁    Standardize rules like:  • who is eligible  • minimum/maximum increases (both $ and %)  • in-range vs out-of-range actions  • when exceptions are required   Most of compensation is repeatable math like this. The above are just a few simple examples but if you want these and more I have something for you. 👇 I built a comp cycle logic playbook where you plug in your cycle inputs and it recommends what to include in your logic. It also has a merit heatmap, a matrix library, a formula sandbox, enterprise budget‑normalization logic, bottoms‑up budgeting, global inflation + FX examples, equity patterns, and cycle flags.   💬 Just comment 𝗟𝗢𝗚𝗜𝗖 and I’ll send it over.

Most companies' compensation models push their employees to optimize for the short term. Annual compensation incentivizes us to think about the next 12 months, not the next 12 years. Here’s how Amazon pays people differently to make them think differently. In most companies, you set annual goals, pay employees annually, and tie bonuses to annual performance. As a result, every decision is about what helps in the next 6–12 months. The problem with this structure is that it discourages risk-taking and long-term investments, while encouraging people to play it safe and protect their annual or quarterly metrics. This comes at the expense of growth. At Amazon, once you become a senior leader, your compensation isn’t based on hitting your annual target—there are no annual bonuses. Instead, you get stock grants that vest over four or more years. And every year, you’d get a new grant, tacking onto the end of the last one. That means if you have a great year in 2025, your “reward” won’t show up until 2029 and after. There’s power in that. It aligns your incentives to the company’s long-term value and forces you to ask, “What will matter five years from now?” instead of “How do I hit this quarter’s number?” This means you can take calculated risks, saying, “This won’t pay off this year—but it will have a big impact in the long term.” That’s rare. Most orgs unintentionally discourage that kind of thinking. You see this same thing at the industry level too. Movie studios knew digital streaming was the future, but they didn’t want to hurt movie ticket sales, DVDs, and cable deals by investing in streaming. This thinking opened the door for Netflix, Amazon and Google to overtake them. So Netflix, Google and Amazon won by thinking long-term, and in Amazon’s case, the compensation system rewarded that thinking. If you want your team to think long-term, you have to consider it holistically, including compensation.

DAY 26 Total Rewards Strategy: Beyond Salary Total Rewards is not just salary. It is the complete value exchange between employer and employee. It includes: • Base Pay • Variable Pay (Bonuses, Incentives) • Benefits (Health, Pension, Insurance) • Recognition • Career Growth • Work Flexibility • Learning Opportunities • Employer Brand When compensation is poorly structured: High performers leave quietly Average performers stay comfortably Pay inequity creates internal tension Business costs increase through turnover When compensation is strategically designed: Performance improves Retention stabilizes Employer brand strengthens Financial planning becomes predictable #HowtoDesignaTotalRewardsStrategy STEP 1: Define Your Pay Philosophy (Write This Down) Answer these 5 questions clearly: Do we want to pay at market average (50th percentile) or above market (75th percentile)? Will we reward performance more than tenure? Are we willing to pay premium for scarce skills? What percentage of compensation should be fixed vs variable? What behaviours are we rewarding? #Output: Create a one page Pay Philosophy Statement. If it’s not documented, it doesn’t exist. STEP 2: Conduct Internal Pay Audit Do this simple exercise: List all roles List current salaries Compare employees in similar roles Identify gaps or inequities Check for: Same role, different pay (without justification) High performer earning less than average performer Pay compression (new hires earning close to long serving staff) #Output: Highlight risk areas in red. These are retention risks. STEP 3: Benchmark Against the Market You can use: Industry reports Professional HR networks Benefits 📌 Decide: Are you leading, matching, or lagging the market? Be intentional. STEP 4: Structure Variable Pay (Make It Measurable) Your bonus structure should answer: What exact target must be achieved? Is it revenue based? Is it productivity based? Is it KPI based? Example structure: • 10% annual bonus tied to company #profitability • 5% individual performance bonus tied to KPI score • Sales commission tied to revenue threshold #Rule: If performance cannot be measured, it should not be incentivized. STEP 5: Define Non Monetary Rewards Not all rewards are financial. Include: Recognition programs (monthly awards) Career progression pathways Learning sponsorship Flexible work options Wellness initiatives Sometimes development retains more than salary. STEP 6: Communicate the Structure Many organizations fail here. Employees should know: How salary increases happen How bonuses are calculated What qualifies for promotion What performance level earns reward Transparency builds trust. Silence builds suspicion. 🎯 Practical Diagnostic Test Ask yourself: Can I explain our #compensationstructure in 10 minutes clearly? Do employees understand how to increase their earnings? Can I defend our pay system at board level? If the answer is no, your #TotalRewardsstrategy is incomplete