Situation:
A nationally recognized drug and alcohol rehabilitation center, concerned about the competitiveness of its executive pay levels and retirement benefits, wanted to validate executive compensation practices vis-a-vis its market for talent. At the same time, it was concerned about succession issues once the founding principals retired, preserving the value systems inherent in its unique culture and ensuring compliance with incentive pay practices in the not-for-profit sector.
Process
Consultants from D.G. McDermott Associates interviewed the founding principals of the organization as well as key members of top management and a cross-section of the Board of Directors. D.G. McDermott Associates also conducted a market study of executive pay levels, practices and benefits of top tier organizations in the industry. D.G. McDermott Associates consultants met with the Board of Directors to present their findings.
Solution
D.G. McDermott Associates recommended the following:
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A revision to the key executive pay practices.
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Specific measures of performance that supported incentive pay within compliance standards for the not-for-profit sector.
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An appropriate retirement package for the founding principals.
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And an overall revision of the performance management system so that every employee's performance review reinforced corporate values.
Outcome
The Board of Directors adopted D.G. McDermott Associates' recommendations.