Top Executives Should Have a Compensation Advisor Like The Ross Companies
The Right Kind of Advice Can Make a Big Difference
The Ross Companies has very quietly offered compensation advice and insights to C-suite executives for many years. We finally decided that the time and climate were right for us to discuss this service publicly.
If you know our business, the first two questions that might pop into your head are, “Why would they provide executive compensation advice? Would a top executive really need it?”
Forget the perfunctory “yes and yes” answer. Here’s how deeply this topic runs for The Ross Companies. Arnold Ross, our late president, was a tremendous innovator. He helped to pioneer such programs as the employee stock purchase plan (ESPP), which he was working on before this became a common employee benefit in public companies. He also co-authored the book Executive Employment and Compensation, which became a popular reference in determining executive compensation packages. (We checked and found old copies of this book on both Amazon and Alibris.) In short, because of Arnold’s innovative, ahead-of-its-time work, being executive compensation consultants became part of our DNA.
Many people are surprised to learn that executives really benefit from this kind of support. People who have advanced into the C-suite – whether as a CEO or president, CFO, CIO or corporation counsel – have done a lot of negotiating on behalf of a company and are really good at it. However, it’s different working on their own behalf than on behalf of their employer. When it comes to their employer, they can default to a “people pleasing” frame of mind and don’t always know where they can create a better package for themselves. There’s anxiety about alienating people they will later have to work with. It’s true they didn’t need our help with the top-line number, but there are many other areas where they can benefit from our guidance. And it helps a great deal to have someone at your side supporting your case, especially when you’re negotiating with a board or committee and are outnumbered, putting you at a psychological disadvantage.
Companies are structured to protect their best interests. Their staff in personnel/HR, legal, and finance are all acting in the best interests of the company to ensure greater protection for the bottom line. At this time, the company’s interests and the C-suite candidate’s interests are simply not aligned during the negotiating process. What’s more, it’s common to receive a promise that in the next year or bonus cycle, compensation will be equalized, a less-than-enticing offer that frequently serves as a tactic to get past an uncomfortable point in onboarding. Anyone who has experienced this has probably also been underwhelmed with the results when they sought to level up in their next cycle.
The Ross Companies will help you to find those areas where you can level up before moving into a new job, and it may not be in the obvious top line area. From our history with ESPPs to creating insurance trusts to building extra compensation for unforeseen future events, our methods can seem prescient when something happens years down the line. At the end of a successful run with a company, we have received thanks from clients for having the foresight to create better long-term compensation goals that hiring committees did not object to at the time of hiring.
For more than 90 years, The Ross Companies has been advising clients on how to resolve complex financial problems using insurance and other tools. These problems can include estate taxes, succession, buy outs, preservation of assets, or executive compensation. Our long history informs our thinking, and while many situations may be similar, we have learned well that each solution must be unique to the circumstances and individuals being served.