Page 3 - 2016 GCSS Newsletter-Issue 10-November 2016_Neat

Industry News

HR Executive Pay Trends 2016 Key Findings

An Equilar Report, featuring commentary by Allegis Partners
1. Median total direct compensation (TDC) for HR
Human Resources (HR) executives have become increasingly integral to corporate executives at companies below $1 billion in revenue totaled
operations, particularly at larger companies. In order to balance their responsibilities $528,492 in 2015, compared to $927,594 at companies with
within the context of overall business strategy, a successful HR executive must meet revenue between $1 billion and $5 billion, $1.4 million at
immediate talent management objectives while remaining cognizant of long-term goals companies between $5 billion and $15 billion, and $2.2 million at
and the current business climate. The complexities of this demanding and pivotal role in companies with more than $15 billion.
a company are reflected by the compensation paid to top HR employees.
2. Performance incentives outpaced base salary at the median
Data shows that the scale for HR executive pay increases in correlation to company for companies above $15 billion in revenue, while for companies
revenue. As such, median total compensation of HR executives at companies over $15 in all other revenue ranges, base salary was the largest pay
billion in revenue was $2.2 million in 2015, compared to $528,492 at companies with component for HR executives in the study.
revenue below $1 billion. Though not universally true, this likely has to do with the fact
companies with higher revenue will also employ larger organizations and require more 3. On average, performance incentives accounted for 12.8% of
moving parts for an HR leader to manage. TDC at the smallest
companies and 29.9% at the largest companies— conversely,
Regardless of size, companies are focused on ensuring that top HR executives are base salary was 42.6% of total pay for the smallest companies
invested in the long-term performance of the company, which is reflected in the way pay and
is structured. Though their compensation is less performance-dependent than CEOs and 23.5% for the largest.
CFOs, data on HR executive pay clearly shows that the pay for performance philosophy is 4. Relative TSR was the most common long-term incentive
prevalent throughout the C-suite.
plan (LTI) metric and revenue
HR Executive Pay Trends 2016 details the state of HR executive compensation in fiscal was the most common short-term incentive plan (STI) metric,
years 2014 and 2015, and considers differences across multiple categories, including featured in 29.8% and 31.8% of LTI and STI plans, respectively.
breakdowns by company revenue and sector. The report analyzes data from annual 5. The study included data from 212 S&P 500 companies,
proxy filings combined with the Equilar Top 25 Survey to provide information on a which awarded a median total compensation of $1.6 million to
comprehensive sample of more than 700 top-paid HR executives. The findings provide HR executives, down from $1.7 million in 2014.
insight into strategies public companies employ to pay the executives entrusted with
hiring and guiding their talent bases. 6. The S&P 500 healthcare sector offered the largest median
pay package to HR executives at $2.3 million in 2015, while
**Click on this link to download the report and to find out more about the findings: utilities offered the smallest at $1.1 million.
http://www.allegis-partners.com/insights/white-papers/hr-executive-pay-trends-2016

WorldatWork Statement on the 2016 Elections

"WorldatWork offers its congratulations to President-elect Donald Trump. Now that the election results
are final, it's time for our leaders in Washington, D.C. to focus on governing and improving our economy.
There are numerous important issues pending, including those that will affect HR and total rewards
professionals. WorldatWork urges our elected leaders to come together to focus on policy solutions that
will benefit employees and employers alike.

"Earlier this fall, we sent a letter to then-candidate Trump and Hillary Clinton outlining the issues that our
members would like to see addressed by the next president, including repealing the automatic updates
to the new Fair Labor Standards Act overtime-pay regulations; support of legislation to simplify the
patchwork of complicated nonresident state income-tax laws; the repeal of the 40% excise tax on employer-sponsored health-care plans (the
Cadillac Tax); affordable child-care and dependent-care programs for employees; and accuracy and fairness in executive compensation through
the repeal of the CEO pay-ratio requirement. These issues affect millions of working Americans and their employers. President-elect Trump has
called for the nation to work together for strong national growth and to renew the American dream, and that starts with a strong and
empowered workforce.

"WorldatWork looks forward to working with President-elect Trump, his administration and policymakers in Congress from both parties as they
begin to work on addressing so many crucial workplace issues. We stand ready to provide research, data and expertise to join the national
dialogue to help policymakers enact policies that limit unintended consequences and instead truly benefit employees, employers and our
national economy."
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