Companies with worldwide operations need to develop compensation plans for employees that are in line with their global business strategy. Companies that articulate a clear global pay philosophy and develop the corresponding compensation programs are best positioned to effectively execute their strategy, since executives and key contributors around the globe are unified on a common set of goals.

The idea of integrating a company's global rewards strategy for executives with business objectives is not new. What gets less attention is the process and elements that companies should analyze when developing a truly global compensation program. Before a company can design a program, it must assess where it falls currently on the "global" spectrum. For instance, an "international" company might have an R&D center in the U.S, manufacture in a low-cost region, and send expatriates to help execute the business strategy in a particular region or country. A company that is truly global operates seamlessly across borders, developing products and services at various locations around the world. Typically, truly global companies have executives that hail from a variety of countries.

Top Five consultants have assisted established multi-nationals and emerging growth companies by helping them assess where they are on the global spectrum and in determining what types of compensation programs are needed to help globalize the company. This entails reviewing current programs and assessing their effectiveness as a company continues to expand internationally. We then begin designing, as appropriate, the following:

• Global and local salary structures (who should participate in the global pay plan?)
• Annual incentive programs (what target levels are appropriate for various regions, and what performance measures are needed?)
• Long-term incentive programs specific to each country (what equity vehicles are appropriate for specific countries when considering local laws and employee expectations?)
• Overall global employee stock ownership (to what extent can broad based equity programs such as ESPPs be rolled out internationally?)
• Expatriate policy development (what policies need to be in place?)
• Communications plans (how do you communicate your plans to ensure that managers and employees understand them and make best use of them?)

To learn more about our international consulting services, contact Jay Edelman at (510) 745-8675 (or email to jedelman@top5.com).