David B. Armstrong, CFA [00:00:33] Okay, Welcome to this episode of Off the Wall. Little bit of a change here. Jessica took care of handling when I was out on vacation, cutting an episode a couple of weeks ago. Now it’s my turn to pay her back. So I’ve got Emily Harper here as co-host for this episode. So, and Emily, this is worth mentioning to the audience because they can’t see anything and they’re listening to this, but this is our first podcast recording in our new office, the new global headquarters for Monument Wealth Management across the street and two blocks up. But anyway, Emily, thanks for for coming on. In today’s episode, we’re going to be talking about all things executive compensation. There’s just so much more than just salary that goes into compensation packages. So we’re going to talk about that today. And if you’re driving on the road in your car, we will have a transcript available. So don’t worry about pulling over to take notes. If you hear something that you want to check back on later. But yeah, Emily, why don’t why don’t you tell everybody a little bit more about the episode today?
Emily Harper, CFP® [00:01:30] Yeah, I mean, it’s it’s so interesting to have our guest here today to talk about this, because the specifics of these compensation packages really have major implications for personal wealth building over the long term. So we’re really excited to collaborate with today’s guest to really bring these worlds together and give our listeners insight into some of the current trends in executive compensation. So we have Laura Balser, a senior client planner in Executive Pay and Governance for Korn Ferry on off the Wall today. She has over 20 years of experience consulting with publicly traded, privately held and not for profit organizations on executive reward and benefit programs and issues across several industries, including health care, distribution, manufacturing, biotechnology and professional services. She’s also a very proud and involved alumna of Emory University’s Goizueta Business School and holds her certified Executive Compensation professional designation from World at Work. So thanks for being with us today, Laura.
Laura Balser, CECP [00:02:31] My pleasure.
David B. Armstrong, CFA [00:02:31] I’m going to jump in also and just throw in a little bit there. But it’s also worth mentioning that Laura and I are old Donaldson, Lufkin Jenrette alum from our Atlanta days. And, you know, since we’re both 35 years old now, it’s just hard to believe they ever hired somebody who was 15 years old back then. But it was a great place to work in.
Laura Balser, CECP [00:02:46] 23 years today.
David B. Armstrong, CFA [00:02:47] Yeah. So.
Emily Harper, CFP® [00:02:50] All right. Well, thanks for that blast from the past, Dave, but we don’t want to talk about the past right now. We really want to talk about current state. So let’s start by talking about some of the trends you’re seeing and executive compensation today. Laura, You know, we live in a really fast paced world where businesses and economies are always changing, especially so post-COVID. Can you talk us through the current state of compensation packages and the conversations you’re having with organizations that you work with?
Laura Balser, CECP [00:03:17] Yeah, sure. So we at Korn Ferry actually conduct an annual study where we look at the top 300 in terms of revenue publicly traded companies. And and we look at the trends of CEO pay year over year and coming out of the pandemic, companies were, I think, cautious and set goals that may not have been as as rigorous as they were before COVID. So in in 2021, what we saw was really higher increases and higher payouts on incentive programs. And even in 20, we saw a lot of organizations use discretion to reward folks for things that they couldn’t necessarily control. And now what we’re seeing is we’ve looked we’ve looked at 2021 and then 20 looking back at 22, is that incentive programs still paid out above target, yet overall pay the increase was a little bit down than it was the year before. So, for example, what we saw from 21 to 22 was total direct compensation increases close to 15% year over year. And what we saw from 21 to 22 was total direct compensation increase of 4.6%. And when I say total direct compensation, what that means is base salary, which is fixed pay plus annual incentive payout and long term incentive granted. That’s equity granted.
Emily Harper, CFP® [00:04:59] Great. Thanks, Laura. Now, you’ve advised across a lot of different industries throughout your career. Is there anything, you know, industry specific? As it relates to executive compensation or industry specific trends that should be considered. For some of our listeners who work in an array of industries.
Laura Balser, CECP [00:05:20] I think that well, first of all, I should say that I do work across various industries and I know that at least from a general industry standpoint, at the executive level, as organizations are looking forward, they’re planning for higher salary increases than they’ve historically made. But you may know that the fact that literally for the last decade, most organizations have sustained a 3% merit increase, while in 20 from 22 to 23, we saw that average go from or the median go from 3% to 4% across all industries. Some industries, though, were more conservative. The retail industry, for example, was more conservative, and we believe that is because they saw pressure on their profits and lower revenues. So they’re being a little more conservative. Whereas with the industrial market, for example, they were more aggressive. We think that’s because some folks would be hung onto their jobs through the pandemic. And then once the pandemic was over, folks started to take the opportunity to move to other roles, and the talent market was really far more demanding or tight. The talent market was tighter in industrial than it was in other industries. So in terms of a base salary or fixed pay perspective, we have seen variability across the potential increases and then the planned increases for the next year. In terms of incentive programs. I don’t I’m not seeing as much differentiation. I mean, that that differentiation is really more in what metrics are in the program and how the organization measures those or weights those metrics within the incentive programs.
David B. Armstrong, CFA [00:07:17] So I’m wondering if you can, you know, in a world where everything’s pretty competitive for that, for the highest level of talent, what are some examples of innovative or unique executive compensation structures that have been successful in, you know, aligning those executive interests with those of the company and, you know, frankly, shareholders?
Laura Balser, CECP [00:07:35] Yeah, I mean, that’s really a fine line, Dave. I mean, you’ll often see an organization provide some sort of signing bonus, if you will, and often in the form of equity that’s most frequently meant to make up for what the individual is walking away from. Right. Because if you’re part of an organization that provides long term equity, long term incentive plans year over year, then you’re then you’d be walking away from at least two tranches of equity being awarded or at the end of the performance period. Right.
David B. Armstrong, CFA [00:08:12] You always be walking away from some sort of deferred compensation. That’s my term. I don’t know if that’s the right term, but some compensation gets tougher. So no matter what, you’re always going be walking away from something. And that’s. So you’re saying that that’s that’s the makeup.
Laura Balser, CECP [00:08:27] That is the makeup. And so you’ll if you read a proxy, you’ll often read whether it’s a CEO or CFO named named executive officers or what are just publicly disclosed. So you’re going to often see that. And that is a normal practice. The quantum varies and it’s often not scrutinized because the shareholders understand that it’s what the person was walking away from. Now, in terms of other ways that organizations are trying to drive that performance, there are some unusual circumstances that that do walk sort of a fine line beyond the traditional annual long term incentive grant. One is a mega grant and one is an outperformance grant. And a mega grant is where somebody is awarded, say, 4 to 5 years of an annual long term incentive grant in one shot. They aren’t granted that if if we want it to pass muster with the shareholders, then that mega grant is just for that one period that is granted. For that, let’s say four or five years, it’s it’s taking it in one shot, then the next four or five years that individual wouldn’t receive any other equity. It’s a single grant meant to give it a shot in the arm, if you will, to that individual with vesting that happens over that period of time in order to try to motivate the individual. And it’s often a combination of PSUs or performance share units and restricted stock units. And again, in sort of sort of in order to pass muster a portion of that, at least 50% of it should be performance based because we want the shareholder wants to see the individual perform. And outperformance grant is one where you’re layering on an additional performance metric, whether it’s TSR or some sort of growth or revenue achievement for that particular individual. And both a mega grant or an outperformance grant are typically awarded to just one individual in a certain circumstance or case to try and motivate that behavior that the organization’s tried to drive.
David B. Armstrong, CFA [00:10:53] Right. So two two terms there that you throughout the PSUs and the RSUs use at like a 30,000 foot level. Can you explain, redefine what those are the restricted stock units in the PSUs and why they’re different what’s similar about them and what’s different and what should people know about those terms.
Laura Balser, CECP [00:11:13] So RSUs are restricted stock units or time based units and PSUs are performance share units or performance stock units, and they are performance based. Now the way they are similar is they are both equity granted at fair market value at a certain point in time, usually annually in conjunction with an incentive program, a long term incentive program, the RSUs or vest typically each year. And so if it’s a three year period when the LTI is granted, the equity is granted, then typically we see a third of the RSUs just after one year, a third after the second year, and the remainder at the end of the third year. And as I said before, they’re time based. So the individual receives the RSUs at the end of the vesting periods simply for remaining employed at the company. In terms of PSUs, they’re they’re granted at the same time. Typically, I’ll step back and say typically what I’d say best practice and shareholder preference is to have at least. 50% of the entire grant be PSUs. So we typically see a 50% PSU 50% RSU. So if you just if you say somebody’s got a $5 million grant at the at the beginning of the period, two and a half million would be in our RSUs, two and a half million would be in PSUs. And that two and a half billion are RSUs. We’ve just, as we’ve just discussed, a third, a third, a third of over that three year period. The PSUs, when they are granted that other two and a half million, there are performance metrics and goals tied to those PSUs. It’s typically a three year period that we are measuring and organizations can put, if you will, in the program, the PSU program. Some organizations have just simply one performance metric that they are trying to align or achieve. Some organizations have two. Some organizations have three, right? I’d say the average of what we see in a performance plan is 2 to 3 metrics, because, look, it’s a risk. You’re setting a goal. You’re saying we’re going to achieve X in three years time. And three years is a long, longer time to measure. And so organizations tend to put at least a couple is not three metrics in the program so that they can achieve some level of payout. And what happens at the end of the three years is the metrics are assessed against the goals and depending upon how they perform A there’s literally linear interpolation that is conducted, right, that there’s a target for the goal. There’s a max, there’s a threshold and linear interpolation occurs and ultimately the PSUs are awarded and they can be at the same exact value. Granted, if they meet the target, they can be higher, more shares if the target is exceeded or fewer shares if the target is not met, but above threshold.
Emily Harper, CFP® [00:14:38] And that would usually be laid out kind of at the outset. We’re not changing things along the way. It’s it’s kind of known.
Laura Balser, CECP [00:14:45] Yes, 100%. In fact, changing things along the way is frowned upon.
David B. Armstrong, CFA [00:14:49] I’ll bet.
Emily Harper, CFP® [00:14:50] I don’t think many people would sign a deal where there isn’t some level of understanding at the outset.
Laura Balser, CECP [00:14:55] Yeah. Yeah.
Emily Harper, CFP® [00:14:56] Great. Thanks, Laura. I definitely want to zoom in a little bit more on the restricted stock and the long term incentives, because that’s one area where we really have a lot of crossover between our two worlds on the personal wealth side and on the executive compensation side. But before we do that, you know, one thing that I’ve just seen a lot written about, seen a lot on LinkedIn, and I think even Korn Ferry has had some, you know, thought leadership in this area is the issue of pay transparency and the impact that that’s having on executive expectations surrounding their compensation. Could you speak a little bit to this trend of pay transparency and how you anticipate it impacting executive compensation packages?
Laura Balser, CECP [00:15:47] Yeah. So the CEO and other named executive officers, typically the top five people in the organization of a publicly traded company, there is pay transparency. There’s always been pay transparency. So, you know, if you’re a CFO joining a publicly traded firm, you can look and see what your predecessor was making. So pay transparency at that level has never been an issue. The pay transparency rules that are out there now are largely, at least my understanding of them are largely around base salary, fixed pay, and it’s about having that pay transparency at lower levels in the organization. That said, you just you heard me in the beginning of our podcast talk about the fact that we’re seeing CEO pay increase year over year and listen, in the 12 years or so that Korn Ferry has been conducting this pay study. I think there’s always been a pay increase and pay increases driven by looking at other organizations, proxies and understanding that pay increases seem to naturally happen year over year and as everybody else’s pay increases, then when an organization goes to benchmark pay for an incumbent, they’re going to see typically an increase in the market. So it’s almost like a circular or vicious, vicious circle of pay increases. But there there are instances where folks do see what how how people are getting paid at the top of the house and they want to understand how does that translate down to them?
Emily Harper, CFP® [00:17:29] Got it. So not really a ton of impact maybe at the the C-suite level, but for broader organizations, you know, it’s starting a lot of conversations and scrutiny.
Laura Balser, CECP [00:17:42] It is. And I got to tell you, I was on the phone with a client last week who said that a new client who talked about the fact that a lot of the younger folks, they just all talk about their pay. And that’s not the generation I grew up in. You know, most folks keep their compensation, you know, close to that, to the to the vester is that he right term. Yeah.
David B. Armstrong, CFA [00:18:09] You can use faster. Yeah, right. That’s right. Yes. I think it’s about cards, right. Like, like playing poker and keeping them closed. So, yeah, I think it can go either way, actually.
Laura Balser, CECP [00:18:17] Right. It’s like, you know, somebody says, well, how’d you do on your bonus? You like, Oh, yeah, I was happy or I was disappointed, but people don’t actually like. Among the people I work with, we don’t talk that transparent. We do not have that kind of transparency. I think the transparency thing, Emily, is, is a generational trend. And then I think the new laws are just going to help make that easier and easier conversation for people to have.
Emily Harper, CFP® [00:18:44] That’s so interesting. I mean, I’m of a different generation and and I don’t know that I would want to be that transparent with anyone either. So maybe it’s a personality preference, but thanks for sharing that, that insight. I’m sure it’s something we’re going to continue to hear more about and see more about, especially as you know, this is the summer of of strong labor and, you know, a lot of things going on in that world. So let’s go back to talking about the stock based compensation, since that is where we really do have a lot of crossover. You know, unlike salary, that’s very fixed, very known stock based compensation, whether it’s in the form of restricted stock units or the performance units like you referenced Laura or options, they come with a lot of uncertainty in terms of value, even if we’re not changing things along the way, you know, your stock price could be, you know, 20% below where it was when you were when you were granted your stock units. So how are you seeing stock based compensation being treated as part of an overall package today? And maybe you could speak to, you know, where options are falling into that, whether incentive stock options or non-qualified stock options?
Laura Balser, CECP [00:20:03] Yeah. So in terms of options like in terms of the mix of equity that we generally see, and this is not only supported by our top 300 pay CEO pay study, but also by broader data, broader, broader survey data. Generally, we see at the top of the House again that the at the C-suite level a pay mix that is 50% performance units, that’s really driven by shareholders who really want to see a minimum of 50% performance units. Then we tend to see if options are in the mix. They’re at a 15% weighting, right? So 15% of the pie and then the remainder at would be RSUs. If, if an organization is using options, I have one client that has 75% PSUs and 25% options. The the unfortunate thing is that, you know, right now with the market, what we’re seeing is a lot of stock prices declining. So to your point, Emily is an organization has been granting PSUs and options there. The value of those stock of the stock that was granted a year or two ago has decreased the stock value. I mean, it’s a number of units said the person was issued. Right. And so if the stock has gone from 100 to 75, they’re already, you know, in the red, if you will, even if they ended up getting a target on their bonuses. So in terms of stock based compensation, that that is a risk in terms of what is awarded. Right. The potential decline of stock price. And honestly, we haven’t seen this happening in a long time. This is the first time probably since, you know, in the past 12 years that we’re seeing more material declines than we’ve seen in the past. So organizations are concerned. They’re concerned about the retention, the retentive aspect of the equity. And if options have been awarded, then they’re likely under water. And it’s an expense when the organization grants the options and if the options are never, if they never get above water or they aren’t, they don’t appreciate enough to warrant an individual exercising them. Then, then the company has lost the expense and the individual has lost the ability to have any wealth creation there. Which is why having RSUs or time based units be a part of the equity mix is important because at least it’s a floor. It’s a floor that may decline in value, but it wouldn’t do would decline necessarily as much as the value of an option that is worth as is pretty much underwater and never able to be exercised.
Emily Harper, CFP® [00:23:07] And I’m wondering, you know, my perspective on the restricted stock units and even non-qualified stock options when I see that clients have those, you know, they tend to be a much bigger tax impact on on and on clients and executives than they may be expected at the outset. You know, the not the restricted stock, especially when at vest. So you’re getting hit with that tax bill?
Laura Balser, CECP [00:23:33] Yup.
Emily Harper, CFP® [00:23:34] Even though you’re not really getting cash, you’re getting your shares. Of course, you could choose to sell your shares. And in fact, a lot of people do sell a percentage by default to cover the tax bill. But when you’re thinking about, you know, C-suite executives who are already in the highest tax bracket, usually that, you know, 24% standard withholding isn’t enough to really cover the tax impact of that restricted stock vesting. And sometimes there’s a situation where there’s a cash mismatch between, you know, the tax bill and the year and the value that they’re getting on that restricted stock. Is there ever a conversation at the outset when someone is being you know, when an executive is looking at their total package and restricted stock is is part of the mix? Is there ever a conversation about adjusting the value of that based on the tax impact? Has anyone ever brought that up or, you know, thought about that?
Laura Balser, CECP [00:24:32] Yeah, you know, that’s an interesting question. There are a few clients that I know of or companies out there that allow folks to elect, you know, what portion. There may be some flexibility in what goes into a PSU versus what goes into an RSU of the overall award. But that’s rare. And we tend to see most organizations default to netting the shares out to pay for that the tax burden that you’re talking about. So you know that that what you’re seeing with your clients is typically a default administrative aspect of getting equity year over year, you know, through the issue program.
Emily Harper, CFP® [00:25:16] Got it. So it’s very important for our listeners to have restricted stock to, you know, make sure you’re not just going through with the administrative default to avoid tax surprises or work with with us and your tax advisors to really understand how that factors into your tax picture year to year.
Laura Balser, CECP [00:25:36] Yeah. And the other thing I’ll add to that is because, look, I know I’ve talked a lot about the top of the house and we think about long term incentive and how it cascades through the organization. What we tend to see is that as the LTI is goes to lower levels below the C-suite within the organization, they are going to have a higher percentage of RSUs. Right. And there are some levels that receive 100% are issues and are getting these annual vesting opportunities each year. So I just wanted to echo and emphasize the point you just made, Emily, because many of our listeners here, maybe at a VP or director level where they’re only receiving our RSUs, they don’t have the PSU potential upside or downside, and it’s something they do need to be more painful for
Emily Harper, CFP® [00:26:28] Right, And I think people, you know, see their initial grant and they see where their stock prices and they think, oh my gosh, this is going to be such a huge, you know, wealth builder for me. But then when you’re taking 40% off the top for taxes and then, you know, it’s very dependent on where your share prices when that stock vest. So, you know, they can be great wealth builders, but there’s so much uncertainty there. But that makes it fun to plan for and and to work with our clients on year to year.
David B. Armstrong, CFA [00:26:56] Yeah. Do you see people ever come through and say, like, I don’t want any of that, I just want cash? Is there pushback? Especially because, like in the context of a 20% pullback that we just went through, right? I mean, like, I’ll bet you that increases the likelihood that somebody comes in and says like, yeah, I just don’t want it. I just want cash. Give me the cash.
Laura Balser, CECP [00:27:13] Yeah. I mean, people ask for cash. Listen, people top of the house, they also ask for cash. But that’s it’s usually not something that is approved. Right. There’s a compensation plan and program that’s in place. And if an organization makes an exception for one person, no matter where they are in the organization. What’s to prevent them from making an exception for other people? Right. And so that typically the compensation program is the compensation program, right?
David B. Armstrong, CFA [00:27:42] Yeah. Emily, That’s why we couldn’t approve you having a McLaren racecar as part of your executive compensation, because we would’ve had to give everybody one, so.
Emily Harper, CFP® [00:27:50] Yeah. Anyone who knows me knows that’s probably not my style. I may be asking for, like, a very expensive wine club membership or a Michelin starred dinner.
David B. Armstrong, CFA [00:28:02] I don’t know. I saw you in the McLaren, but. Okay, so. So, Laura, there’s just, like, there’s so much great information about what’s going on out there in the world of executive compensation. But okay, so how does somebody actually take all that information and and know what you as an executive should expect when you’re negotiating this compensation package? I mean, like, how do you know what levers to pull?
Laura Balser, CECP [00:28:26] Yeah, well, I always tell people seek advice, right? If you’re if you’re working with a search firm or partner, ask the person who is representing you. You know, I realize that the search partners likely retained by the client, Right. By the corporation. But it’s the search partner can also offer information to the individual. I always offer to my friends if they ever want, you know, input, please feel free to reach out. But the fact is, whatever the compensation package, I believe when a company makes an offer, they always expect a counter. So I always tell people counter write, the worst thing that will happen is they say no. Right, right. But I but I do feel like when an organization makes an offer, they’re expecting the individual to come back and make a counteroffer, whether it is to base salary, whether it is to equity or incentive, short term incentive target percentage or or equity within the organization. That said, the way compensation programs typically work is that, for example, annual incentive is offered and it’s a percentage of one’s base salary. That percentage is typically aligned with one’s level within the organization. That’s not typically a lever that can be moved dramatically. There may be a range, but I see it more as a static percentage of 50% a base salary or 20% of base salary, whatever it is, depending upon what level one is in the organization. So short term incentive is an element that is a lever that that really can’t be easily tempered or manipulated. But if you have if you ask for a higher base salary, then naturally that annual incentive target will go up because it’s a percentage of your base salary. In terms of long term incentive, we often see that awarded as a flat dollar amount or a percentage of salary. So if an organization has flat dollar amounts, again, those flat dollar amounts are likely based on the level of the person in the organization. Again, there may be a range for, you know, that an organization has, and they may grant more equity to somebody who’s a higher performer, right as a way to incent them. Whereas somebody who’s neutral maybe hasn’t exhibited maybe they give that person a little less. So LTI Incentive equity is something one could probably negotiate a little bit more on if it’s part of the annual equity program. And in terms of of what an individual’s walking away from, you should always negotiate, in my opinion, for what you’re walking away from. If you’re if your annual incentive bonus hasn’t been paid out yet and you’re accepting an offer with a new organization, then you should ask for that new organization to to make you whole essentially on the incentive and on any equity or long term incentive. You might be walking away from very few organizations these days, or I’d say it’s not as prevalent these days to offer car allowances or other executive benefits. I mean, some organizations might have a nonqualified plan where an individual can defer his or her own money and defer that cash to a point in the future. But we’re seeing fewer and fewer executive benefits or perks. So that’s we don’t really see that. That’s something that one can negotiate for. If it is offered, it’s part of a standard package you to a certain group of folks typically at the top of the house in the organization.
David B. Armstrong, CFA [00:32:28] Gotcha. Yeah, I that too. Two things. Emily heard me say this over and over again, but to the extent about asking, you know, first questions are costless, right? So and then to the answer to every unasked question will always be no. So just ask the question. Right. So there you go.
Laura Balser, CECP [00:32:46] I love that.
Emily Harper, CFP® [00:32:47] Yeah, questions are costless. But Laura, are there any red flags that stand out to organizations when someone is negotiating, negotiating an offer, or any situations you’ve seen where someone may have overplayed their hand a bit?
Laura Balser, CECP [00:33:02] Yeah, I do think there’s a balance to that, Emily, because I think that if one is over and trying to think of what the right adjective would be, if one is egregious and what they’re asking for and it’s a take it or leave it sort of, you know, meet my office, meet me where I want to be or I’m walking away. Then then that person really does run the risk of of turning off the company and or starting off on the wrong foot. You know, I think negotiation is an important business tool and it’s important an important part of getting started with a company to exhibit that one can negotiate, negotiate in good faith and negotiate fairly. Right. And I think fairly and reasonably are probably the two most important adjectives here. Right. And that if one goes beyond the the scope of of feasibility, will they have acceptance to accept something more reasonable or is is this a sign of how difficult the person might be on a go forward basis? So I think it is a fine line that one has to to to step around.
Emily Harper, CFP® [00:34:14] And back to something that you said, Laura, about, you know, on the short term side of things, it’s a little bit less flexible, a little bit less negotiable there. I would also imagine, you know, if someone is coming in and they’re very focused on the short term and and trying to negotiate that as the at the expense of, you know, really caring about the long term incentives, that’s probably a red flag that you’re not very invested. And this organization that you’re coming to.
Laura Balser, CECP [00:34:40] Right. Like you don’t have a line of sight or you don’t want to have a line of sight to the future performance and. Growth of the organization. That could be concerning, for sure. Yeah.
Emily Harper, CFP® [00:34:51] Well, thank you so much for sharing all of this, Laura, and lending your expertise today and and pulling back the curtain on so many facets of executive compensation. It’s really interesting to hear what’s going on in the world today. And if if we know anything, it’s that change is inevitable. Today’s world might not look like tomorrow’s. Do you have any final thoughts on how executive compensation may evolve or trends that you anticipate in light of our ever evolving expectations of companies? There’s a lot of dynamics that force right now, like like stronger labor. You know, anything that you see maybe changing in the near term.
Laura Balser, CECP [00:35:32] I think especially for publicly traded organizations, there’s going to be a continued emphasis on variable pay. Variable pay being everything outside of base salary because shareholders want performance. Right. And what we’re seeing, what we’ve seen actually in the last year or so is that organizations may have a positive three year TSR total shareholder return that they a lot of organizations in 2022 had one year negative TSR and that is bringing a bit of scrutiny from the shareholder services, the proxy shareholder services and the shareholders. Right. Wanting to ensure that the executives and those who have equity are really driving further performance that’s out there. I think we’re going to be a little challenged because some organizations have set goals maybe that are a little too aggressive or that they believed were achievable when they first set them. And I think we’re going to see some organizations with zero or very low payouts on long term incentive. And when you couple that with lower share price, I think we’re going to see organizations, some organizations faced with retention concerns. You know, so I think we’re we’re in a bit of we’ve got some rough seas ahead of us, you know, in terms of being able to reward for performance in a way that an organization wants to and and balance that with shareholders who only want to see or who prefer to see more performance based compensation, balancing that with concerns we might organizations might have around retaining their high potentials doesn’t even have to be executives. Right? How can we retain folks when the company isn’t performing the way we’ve expected it to? So I think there’s a that that’s where I see there might be a little some bumpy roads ahead in terms of compensation because people aren’t going to get those payouts that they the value of those payouts as if they on the day they were granted.
Emily Harper, CFP® [00:37:54] Got it. Well, thank you so much, Laura, for being here. Like Dave said, that there will be a transcript of this episode. So if you’ve been driving or otherwise occupied, you can always go back to the transcript. And we also have some resources on stock based compensation that we can link to. So Laura, thank you again for lending your expertise. It’s been really fun and we really appreciate your time. Thanks.