ESOP company leaders face all the usual challenges in setting executive compensation as well as a few that are unique. If you think of a well-constructed executive compensation program as a house, the outside compensation study is one tool that you have at your disposal to help build the house, but you must use the tool appropriately. Some companies treat compensation studies as a hammer and use them to whack every compensation issue that surfaces, while some companies never use this tool at all. The answer is somewhere in between, and this chapter discusses the proper use of this tool.
Original content written for The National Center for Employee Ownership, Executive and Director Compensation in ESOP Companies, Sixth Edition (2020). The full digital publication is available for purchase from NCEO here.