This Week's Herman Trend Alert Navigating the Next Year

The Herman Trend Alert September 3, 2008 Executives--A Dollar Shorter As management consultants, we encourage candidates to evaluate prospective employers based on the total package of compensation, now called, "total rewards", including fringe benefits and perquisites. Recently, the compensation research firm Equilar conducted a study, detailing trends in "total rewards" for top executives of the 95 largest public companies by revenue in the United States. Equilar tracks nine major areas of perks, including corporate housing benefits, personal and home security, and country club memberships. This year's study found the median values of seven of the nine major CEO perquisites it tracks had decreased. New Securities and Exchange Commission (SEC) rules require companies to disclose perks that cost more than $10,000; previously, the threshold for reporting was $50,000. Not surprisingly, this new level of disclosure has led to a decline in upscale extras. While these top public companies are spending more in two of the study's included areas of CEO perks, in general, executives are receiving the same or fewer "goodies" than last year. From 2006 to 2007, the median value of CEO perquisites related to financial planning benefits (including other professional services such as tax preparation) declined by 9.2 percent, while expenditures for the personal use of corporate aircraft declined by 9.8 percent. The decreases reflect the concern of boards of directors to seem vigilant in their financial oversight. In fact, some companies are actually reporting more than is required by law to demonstrate their transparency. Only two areas showed increases. First, the extra cash to compensate for taxes assessed on the attributed income of fringe benefits, increased in 2007 by an unexpected 43.6 percent. Second, the median value of personal and home security benefits for these executives showed an increase of 14.4 percent. The latter really only increased due to the inclusion of Michael Dell whose company spent over $1 million on his home security system. These trends reflect that privately held organizations have an advantage over others, because there is no required reporting. Private companies will be able to "sweeten the deals" for prospective executives, without concern about SEC oversight. Private companies will surely win this war for executive talent. © Copyright 1998-2008 by The Herman Group, Inc. -- reproduction for publication is encouraged, with the following attribution: From "The Herman Trend Alert," by Roger Herman and Joyce Gioia, Strategic Business Futurists. (800) 227-3566 or http://www.hermangroup.com. The Herman Trend Alert is a trademark of The Herman Group, Inc." RESOLVE TO ADDRESS EMPLOYEE TURNOVER IN 2009 If you knew just how much money turnover is costing your company, you would have handled it ages ago! Turnover costs A LOT and it comes right off the bottom line. Let The Herman Group and its team of very experienced consultants help you address your turnover issues right away. We have an impressive track record and stand ready to help you. Call Carol at 800-227-3566; international, call 336-210-3547 for a no-obligation conference call. EMPLOYEE RETENTION BEGINS WITH GOOD SELECTION If you are not using pre-employment assessments, you are flying without radar---not very smart in today's highly competitive environment. Let us help you better understand your candidates and your employees. In less than 30 minutes, you will know if they can do the job (abilities); their work behaviors, even their personality and attitudes (like integrity & ethics), and those can't be trained. It's very cost effective, too! For more information, contact Joyce at 336-210-3548 or e-mail assessments@hermangroup.com. Validated for many countries and cultures. We offer in-depth help with job descriptions, too! GET INSIDE THE MINDS OF YOUR EMPLOYEES Find out what's really going on inside the hearts and minds of your employees. Our InnerViews interviewing service uses SPHRs and PHRs, certified human resource professionals to probe for the information you really need to know. Exit and Stay Interviews, as well as Why-Didn't-You-Take-Our-Offer Interviews. Call Rosalie Catalano at 937-648-1918 or read more at: http://www.hermangroup.com/retentionconnection/exit_interviews.html. To read this Herman Trend Alert on the web: http://www.hermangroup.com/alert/archive_9-24-2008.html. Herman Trend Alerts are produced by the Herman Group, strategic business futurists, Certified Management Consultants, authors, and professional speakers. New subscribers are welcome. There is no charge for this public service. The Herman Trend Alert is received by over 30,000 subscribers in 78 countries, in addition to other websites and printed magazines. Do you enjoy receiving this weekly e-mail update? 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