Benefits and Compensation

Comp Decisions Are Urgent, but Take Your Time

Many companies are making major decisions about their compensation programs without even running their plans by HR, says Attorney Lisa Van Fleet. You can’t let the financial people make those decisions, she adds.

Yesterday’s Advisor featured Van Fleet’s advice for dealing with deferred compensation changes. Today we’ll get her specific recommendations about compensation decisions, and take a look at a unique source for compensation data and guidance.

Van Fleet, a partner with the St. Louis office of the law firm Bryan Cave LLP, points to the use of company stock in a plan as an example of an area where there may be poor decision making. Putting company stock in a plan is always risky, says Van Fleet, but even more so in this environment. People have their 401(k) money (or other qualified plan money) in company stocks, and now they have concerns about investing in a stock that may have declined significantly in value recently.

It’s true with Employee Stock Ownership Plans, as well, she adds. "We’ve seen some company stocks in plans decline by 50 percent over a 3-month period recently," she says.

“When that happens, you have to be very careful about how you make payouts from the plan. When there are wild swings in the value of the stock, the payout you make to someone may be to the detriment of other participants,” she cautions.


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Decisions Are Urgent, but Take Your Time

Yes, the decisions are urgent, she says, but that doesn’t mean you make decisions without thought. As is often the case, the answer comes down to process and procedure—facts and circumstances, she says. “It’s hard, because there is no safe harbor rule, no sense of comfort. You need to have good processes, good procedures in the absence of anything definitive to hang your hat on.” You should seek out good legal guidance, she says.

Bottom line, says Van Fleet, although the economy may require some quick decisions with regard to staffing, benefits, or compensation, don’t be too quick to make them.

Making Decisions Without the Usual Vetting

“These are urgent issues, but I’m seeing people make decisions that are not being vetted as they otherwise would be—that is, run by lawyers, run by consultants, run by the people in HR,” she says. “Sometimes we’re seeing these decisions being made by people responsible for the budget, rather than HR.”

Normally, employers think about design changes in a measured, systematic way. But in the last 6 months, because of the compelling economic environment, some are not taking their time and considering the implications of their decisions, Van Fleet says.

“How you implement the changes is important,” she explains. “If you don’t think it through, you may end up without having saved any money at all. In fact, your decision may actually cost you more money, because you end up in noncompliance or being sued over it.”

People think compensation is easy, but it never is, is it? Many of the professionals we serve find helpful answers at Compensation.BLR.com, BLR’s comprehensive compensation website. And there’s great news: The site has just been revamped in two important ways. First, compliance focus information has been updated to include the latest on COBRA, Lilly Ledbetter, and FMLA. Second, user features are enhanced to make the site even quicker to respond to your particular needs:

  • Topics Navigator—Lets you drill down by topical areas to get to the right data fast.
  • Customizable Homepage—Can be configured to display whatever content you want to see most often.
  • Menu Navigation—Displays all of the main content areas and tools that you need in a simple, easy format.
  • Quick Links—Enable you to quickly navigate to all the new and updated content areas.

The services provided by this unique tool include:

  • Localized Salary Finder. Based on reliable research among thousands of employers, here are pay scales (including 25th, 50th, and 75th percentiles) for hundreds of commonly held jobs, from line worker to president of the company. The data are customized for your state and metro area, your industry, and your company size, so you can base your salaries on what’s offered in your specific market, not nationally.

Try BLR’s all-in-one compensation website, Compensation.BLR.com, and get a complimentary special report, Top 100 FLSA Overtime Q&As, no matter what you decide. Find out more.


  • State and Federal Wage-Hour and Other Legal Advice. Plain-English explanations of wage-hour and other compensation and benefits-related law at both federal and state levels. “State” means the laws of your state because the site is customized to your use. (Other states can be added at a modest extra charge.)
  • Job Descriptions. The website provides them by the hundreds, already written, legally reviewed, and compliant with the Americans with Disabilities Act (ADA) mandate that essential job functions be separated from those less critical. All descriptions carry employment grade levels to current norms—another huge time-saver.
  • Merit Increase, Salary, and Benefits Surveys. The service includes the results of three surveys a year. Results for exempt and nonexempt employees are reported separately.
  • Performance Appraisal Wizard. Takes the "dreaded" out of performance appraisal.
  • Weekly Ezine and Best Practices Advice. Comp and benefits news updated daily (as is the whole site).
  • "Ask the Experts" Service. E-mail a question to our editors and get a personalized response within 1 business day.

If we sound as if we’re high on the program, it’s because we are. For about $3 a working day, the help it offers to those with compensation responsibilities is enormous.

This one’s definitely worth a look, which you can get by clicking the links below.

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