SPAC vs. IPO: Is There a Difference in Executive Compensation?

An emerging company in need of capital to grow has an important decision to make: how and when to raise the necessary capital.

The traditional way of taking an emerging company public in an initial public offering, or IPO, is being displaced by a new method involving a SPAC, or special purpose acquisition company. A SPAC is a “blank check” shell corporation “created specifically to pool funds in order to finance a merger or acquisition opportunity within a set timeframe,” according to the Securities and Exchange Commission. “The opportunity usually has yet to be identified”.

The SPAC is typically led … Read more

Arthur J. Gallagher discusses Study of 2014 Short- and Long-Term Incentive Design Criterion

In order to investigate what (and how much) is being reported in annual proxy statements about executive pay packages and how incentive pay is designed, Arthur J. Gallagher & Co.’s Human Resources & Compensation Consulting Practice (formerly James F. Reda & Associates a Division of Gallagher Benefit Services, Inc.), has conducted a study of the 2015 annual proxy statement disclosures for 200 of the top U.S. companies (based on revenue and market capitalization). This is the seventh consecutive year we have conducted this in-depth analysis for the top-200 public companies.

It has been almost five years since the Dodd-Frank Wall … Read more

Arthur J. Gallagher & Co. discusses Incentive Trends in Executive Compensation

With Say on Pay (“SOP”) now entrenched in the psyche of compensation committees along with Institutional Shareholder Services’ (“ISS”) evolving standards, improving disclosure of short- and long-term incentive (“STIP” and “LTIP”, respectively) plans, including measures used, the values associated with those measures, and how they can be expected to drive performance, should continue to be a priority for all public companies.

In order to review incentive trends (particularly, the underlying incentive design), Arthur J. Gallagher & Co.’s Human Resources & Compensation Consulting Practice has conducted a study of 2013 compensation data as disclosed in 2014 annual proxy statements for 200 … Read more

The Move Away from Stock Options Continues

The following post comes to us from James F. Reda, Managing Director, Kimberly A. Glass, Principal, and David M. Schmidt, Senior Consultant, all in the HR & Compensation Consulting Practice at Arthur J. Gallagher & Co. It is based on their recent article, which was published in The Journal of Compensation and Benefits.

The demise of stock options continues, according to recently filed information with the U.S. Securities and Exchange Commission (“SEC”).  The slide in stock options began in 2003 and extends to today. While a large percentage of companies use stock options as a component of their long-term … Read more

Internal vs. External Candidates For CEO Succession

The following post comes to us from James F. Reda, Managing Director, Executive Compensation & HR Consulting, Arthur J. Gallagher & Co., and is based on his recent paper, “Internal vs. External Candidates for CEO Succession,” which is co-authored by Joseph A. Wert, Regional Practice Leader, Executive Compensation & HR Consulting, Arthur J. Gallagher & Co. The full article, which was published in the November/December 2013 edition of The Corporate Board, is available here.

Despite being a keystone duty of a corporate board, CEO hiring and succession is often a governance afterthought. Pressures from the SEC and investors … Read more