Professional Documents
Culture Documents
DESCRIPTION
Gamma Financial structures a simple choice-based retention grant for the most critical managers and uses grant
conversations as an opportunity to recognize recipients.
By lengthening the vesting period as the payout value of grant choices increases, the organization ensures it receives
the “return” it needs—in terms of retaining its critical talent—for the resources it invests in its grant program.
COMPANY SNAPSHOT
Gamma Financial
1 Pseudonym.
From CLC COMPENSATION™
of the CORPORATE LEADERSHIP COUNCIL®
www.cr.executiveboard.com
1
With declining revenue
and many employees’
AN UNCERTAIN FUTURE AND LESS GAMMA
Financial
stock options underwater,
Gamma Financial1
RETENTION POWER
became concerned
about retaining its best Historical Gamma Financial Stock Price, January 2007 Through March 2009
managerial talent.
“In late 2008 and early 2009, we went through a very tumultuous financial
time. People were spending less money, which impacted our revenue, and the
financial credit markets had frozen. Many of our managers had a significant
number of stock options, which had no retention value when our stock was trading in
the single digits. We needed our best people to help manage out of the difficult time,
and we knew it was important to make sure key talent felt that we were putting our
arms around them.”
Vice President Compensation, Gamma Financial
1 Pseudonym.
From CLC COMPENSATION™
of the CORPORATE LEADERSHIP COUNCIL®
www.cr.executiveboard.com
PRACTICE
SITUATION COMPONENT 1 COMPONENT 2 COMPONENT 3 RESULTS
© 2010 The Corporate Executive Board Company. FOUNDATION
All Rights Reserved. CR6692510SYN
2
Gamma Financial1
structured a choice-
COMPELLING CHOICES FOR CRITICAL TALENT GAMMA
Financial
based retention grant
for the most critical Gamma Financial Process for Administering Choice-Based Retention Grants to Critical Talent
managers to maximize
the perceived value
of awards. 1. Identification of 2. Value-Based 3. Recognition-
Critical Talent by Design of Grant Focused Grant
Business Leaders Choices Conversations
■ The compensation function
provided business leaders
with a list of the top
Top Managers by Business Unit Retention Grant Choices Senior Leader Recognition
managers in their group but
allowed them to adjust it
based on business needs.
Business Unit C 1. Long-term cash at 100% of
■ Gamma Financial provided Business Unit B target value, payable after 18
choice-based retention months
grants to these managers, Business Unit A
2. Restricted stock at 125% of
which were designed target value, payable after
to maximize managers’ Jennifer Ramsey
three years
perceived value. Anton Williams
3. Half restricted stock and half
Namrata Gupta stock options at 150% of target
■ The compensation function value, payable after four years
prepared senior leaders Michael Borrel
to deliver the grants and George Smith
use the conversation as an
opportunity to recognize
each manager and to explain
the value of the grant. Gamma Financial Insights
Provide business leaders not Balance individual and Maximize award impact by
only with guidance, but also the organizational value when using grant conversations as
flexibility to adjust eligibility based creating grant choices. an opportunity to recognize
on business needs. recipients.
1 Pseudonym.
From CLC COMPENSATION™
of the CORPORATE LEADERSHIP COUNCIL®
www.cr.executiveboard.com
PRACTICE
SITUATION COMPONENT 1 COMPONENT 2 COMPONENT 3 RESULTS
© 2010 The Corporate Executive Board Company. FOUNDATION
All Rights Reserved. CR6692510SYN
3
The compensation
function provided a
GUIDANCE WITH SOME FLEXIBILITY GAMMA
Financial
recommended list of
managers to receive
grants, but it gave Gamma Financial1 2009 Talent Assessment Results for Managers
business leaders the
flexibility to adjust it
based on business needs. Managers Targeted for the Program
High
Considerations for Leaders When Adjusting
■ The compensation function the Grant Recipient List
provided a list of the top
managers—those with the Criticality of a particular role or
highest levels of potential individual to business unit success
and contribution based (e.g., technical expert in risk
on the annual talent management)
assessment—to business
Potential
Low
Low High
Contribution
1 Pseudonym.
From CLC COMPENSATION™
of the CORPORATE LEADERSHIP COUNCIL®
www.cr.executiveboard.com
PRACTICE
SITUATION COMPONENT 1 COMPONENT 2 COMPONENT 3 RESULTS
© 2010 The Corporate Executive Board Company. FOUNDATION
All Rights Reserved. CR6692510SYN
4
Gamma Financial1
balanced employee and
STAY LONGER, GET MORE GAMMA
Financial
organizational value
when designing the Potential Retention Grant Package Choices and Characteristics
grant choices.
Choices Offered
Retention Time
■ Gamma Financial considered 18 Months Three Years Four Years
value to the organization in Lowest
A lower-value
terms of employee retention, cash choice is Target Value: 100%
as well as the expected risk offered because Target Value: 100%
Vehicle: Half RSUs,
and payout value from the some employees Vehicle: Cash
Half Stock Options
are willing to
employee perspective.
trade off value
to receive their
■ The company offered payout sooner.
three choices—each with
Target Value
increasing levels of retention Target Value: 125%
value, expected payout Vehicle: RSUs
value, and risk.
1 Pseudonym.
From CLC COMPENSATION™
of the CORPORATE LEADERSHIP COUNCIL®
www.cr.executiveboard.com
PRACTICE
SITUATION COMPONENT 1 COMPONENT 2 COMPONENT 3 RESULTS
© 2010 The Corporate Executive Board Company. FOUNDATION
All Rights Reserved. CR6692510SYN
5
Senior leaders used the
grant conversations as an
RECOGNITION-FOCUSED GRANT GAMMA
Financial
opportunity to recognize
managers.
PRESENTATIONS
Structure of Retention Grant Conversations Led by Senior Leaders
■ Leaders were encouraged
to use the conversations as Senior leaders maximize the impact of communicating the grants to recipients by structuring
a moment of recognition the conversations in the following way:
that will make employees
feel valued, focusing
on the employee’s past
performance and future Recognize the recipient for his or her past performance and
Recognize Strong
potential. contributions to the organization.
Performance
Explain that the grant choice enables the recipient to make the
Explain Value
most beneficial selection possible for his or her current situation.
of Grant Choice
1 Pseudonym.
From CLC COMPENSATION™
of the CORPORATE LEADERSHIP COUNCIL®
www.cr.executiveboard.com
PRACTICE
SITUATION COMPONENT 1 COMPONENT 2 COMPONENT 3 RESULTS
© 2010 The Corporate Executive Board Company. FOUNDATION
All Rights Reserved. CR6692510SYN
6
Gamma Financial1
retained almost all
(ALMOST) 100% RETENTION GAMMA
Financial
of the grant recipients,
due in part to the choice
employees received Retention of Grant Recipients Distribution of Recipients
among grant options. After One Year Across Grant Choices
Percentage of Recipients Percentage of Recipients
1 Pseudonym.
From CLC COMPENSATION™
of the CORPORATE LEADERSHIP COUNCIL®
www.cr.executiveboard.com
PRACTICE
SITUATION COMPONENT 1 COMPONENT 2 COMPONENT 3 RESULTS
© 2010 The Corporate Executive Board Company. FOUNDATION
All Rights Reserved. CR6692510SYN