Consultants Present Advice When "Question-Mark Concerned" Companies Try To Lure An Exec

Offering to pay an executive a guaranteed contract would attract top talent. Generous compensation plans may draw "executive stars" away from top companies. Once the exec takes a leadership role in the new company, answers to an important question emerge: "Will the exec do the best job or merely collect a guaranteed paycheck?" If the executive coasts and performs poorly, sending him/her home is an option. Since the deal involved a guarantee, the former exec now collects a guaranteed salary until the contract expires. No business wants to deal with this kind of costly situation. Working with an executive compensation consulting company (such as Gressle & McGinley LLC.) early on might prevent a managerial disaster scenario. 

The Executive's Worth And New Employer Concerns

One benefit to being "top talent" is others see a star's value. Skilled executives know this, which is why they command high salaries, perks, and more. To lure them away to a new company requires paying them well. Usually, they need a generous raise. Many want a guaranteed deal to cover them for several years if things don't entirely work out. Why would someone leave a current position for a mediocre deal? Offering too much to lure in an executive might prove counterproductive. The elements that made him/her successful at one company might not exist at the new one. And who knows what baggage the exec carries that the previous employer covered up. Again, working with a consultant could help come up with a plan feasible to all parties. 

The Consultant's Outside Perspective

A consultant could look over the situation from an outside perspective. He/she isn't in the same position as the company looking to hire an executive. Imagine if the board of a struggling company sees quarterly losses piling up. Fear, anxiety, and desperation arise. Such feelings don't always help board members make reasoned, thoughtful decisions. A consultant, however, might present the desirable third-party perspective that doesn't succumb to internal company pressures.

Downsides and Incentives 

A consultant could come up with ideas that may work for everyone. For example, the consultant could suggest a downside guarantee on the contact. The executive will earn more per year based on incentives, profit sharing, and other measured achievements. This way, the company can feel confident the executive will take success seriously. If not—and he/she has to be let go—the guaranteed portion may be an acceptable loss.

Consultants only advise, though. The decision remains with the contracting company. Hopefully, those seeking a consultation can recognize good advice when they hear it.