Compensation and Benefits Advisory Services
McDermott Can Help
Employee compensation and benefit programs represent a significant investment by most companies. The challenge for human resource professionals is to develop programs that support and advance the company’s strategic plans, use financial resources efficiently deliver tax efficiencies to the company and its employees and comply with a range of legal requirements. Bottom-line results matter, and a “one-size-fits-all approach” is not the answer.
McDermott’s Compensation and Benefits Advisory Practice Group can work with you to align your company’s goals and resources to attract and retain the best and brightest employee team, and we do it in a way that can reduce the tax and financial burdens related to executive and broad-based compensation programs. With a portfolio of tax-sensitive services, we can help you achieve measurable results.
Our comprehensive range of services includes competitive analysis, legal compliance analysis, design and evaluation, tactical planning, implementation and ongoing monitoring. These services can give your organization an advantage in a competitive market.
Executive Compensation Advisory Services
Executive compensation programs that support and advance the company’s strategic plans are critical to an organization’s financial success. Compensation programs that attract and retain key talent use financial resources prudently, deliver tax efficiencies for the company and executives, and receive favorable financial statement treatment. These principles are the underpinnings of our approach.
McDermott’s Compensation and Benefits Advisory Practice Group can work with you to help align your company’s philosophies and objectives to attract and retain a first-class executive management team. We do it in a way that can help you reduce the tax and financial burdens related to executive compensation programs.
Our comprehensive range of services includes competitive analysis, strategic and tactical planning, legal compliance analysis and monitoring, program planning and design, implementation, ongoing monitoring and support, performance-based measurement compensation delivery systems, compensation committee support and governance services.
Global Incentive Compensation Advisory Services
The move toward a global marketplace yields significant opportunity for both large and small organizations. The downside: as organizations seek to migrate their home-country incentive compensation plans to their employees abroad, they are challenged with a myriad of legal, regulatory, tax and administrative issues. Moreover, in many countries the rules regarding treatment of various types of incentive compensation plans are new or unclear, in the process of being amended, or nonexistent.
Conversely, there may be situations where an employer is not taking advantage of the various tax planning or cost-reduction opportunities that exist for these plans in international jurisdictions. Many organizations may be overpaying for social insurance and not claiming appropriate corporate tax deductions. Further, companies with global incentive compensation plans may have a tax-efficient opportunity to repatriate cash.
McDermott’s Compensation and Benefits Advisory Practice Group can assist you in enhancing the return on your investment in incentive compensation plans by identifying opportunities to:
- Encourage plan participation
- Enhance regulatory compliance
- Increase tax efficiency
- Provide greater overall flexibility in plan management
- Streamline administration and operations
Our primary objective is to help you create cost-effective incentive compensation plans to attract and retain the top talent you need to stay competitive on a global basis.
Organizational Compensation Advisory Services
The significant impact of globalization on productivity and workforce composition as well as the current competitive business environment demand the compensation provided to all employees be determined as part of a well-conceived and clearly articulated organizational compensation philosophy and approach.
McDermott’s compensation advisors can assist with the development and implementation of organizational compensation programs in the following ways:
- Analyzing organizational structure and work measurement
- Conducting competitive market analysis for benchmarked positions by analyzing base salary, short- and long-term incentive compensation, benefits and perquisites
- Designing and implementing work measurement and salary administration systems
- Developing an organizational compensation philosophy and approach
- Training human resources professionals to properly implement and administer a compensation system
Defined Benefit Plan Advisory Services
Organizations that sponsor defined pension benefit plans currently face numerous challenges, including an unprecedented amount of financial pressure due to poor plan earnings performance, a low interest rate environment and an aging population. We can assist you in aligning your defined benefit plan with your organization’s objectives to meet these challenges through several advisory services, such as approach and design; analysis of tax efficiencies, costs and trends; funding; Financial Accounting Standard (FAS) No. 87 issues; legal compliance and operational reviews; and the implications of mergers and acquisitions.
Defined Contribution Advisory Services
Increasingly defined benefit pension plans are falling out of favor with both large and small employers. The unpredictability of financial support to pensions largely contributes to this trend. Therefore, organizations are challenged to sponsor competitive retirement programs that are more predictable than defined benefit programs and are valued by employees. Our advisors can assist in aligning your defined contribution plan with your organization’s objectives to meet these challenges, including approach and design; analysis of tax efficiencies, legal compliance analysis, costs and trends; funding; operational reviews; and more.
Health and Welfare Advisory Services
As health care costs continue to increase, we evaluate and design competitive health and welfare benefit pre- and post-retiree programs that promote our clients’ organizational philosophies and objectives. We can assist you with strategically fitting together the pieces of the puzzle to create an effective and cost-efficient plan. We focus on aligning your health and welfare benefit plans with your organization’s objectives to meet these challenges. Our services include: approach and design; analysis of tax efficiencies, costs and trends, funding; legal compliance and operational reviews; and more.
Transaction Advisory Services
Organizations anticipating a transaction, such as a merger, divestiture, sale, acquisition, etc., face numerous challenges in achieving an appropriate human resource balance after the transaction.
Pre-merger Due Diligence
Significant hidden exposures and liabilities often exist in the compensation and benefits area, especially with respect to pension plans, retiree welfare benefits, and executive programs and agreements. Balance sheets and past contributions most often do not indicate the true costs of these types of programs. In particular, transactions involving the carve-out of a subsidiary or other unit of a larger entity are liable to involve benefit costs that are much different from those discovered in routine financial due diligence. Executive programs could trigger “excess parachute” payments to executives, resulting in tax penalties for executives and loss of compensation deductions for employers. Our benefits due diligence can reveal information regarding these types of exposures and liabilities, which can often lead to the identification of purchase price adjustments, cost savings opportunities and potential mitigation strategies for identified exposure items. We also evaluate benefit plans, including health and welfare plans, from either a post-transaction ongoing cost or an existing cost standpoint.
A crucial transaction issue is employee retention; it is critical to maintaining the value of the business before, during and after the transaction takes place. With diverse backgrounds, including experience as compensation consultants and former industry human resources professionals, our compensation and benefits team is highly qualified to assist our clients in this area.
Post-merger Integration
Once a decision is made to move forward with a transaction, an overall project plan requires development to assure readiness post close for such important issues as system and payroll functions, employee communications and enrollments, cultural integration, legal forms and government approvals, vendor selection, transition service agreements (if needed) and program migration (executive, broad-based compensation retirement and benefits programs).
Our Competitive Edge
Our Compensation and Benefits Advisory Practice Group includes professionals from a variety of backgrounds, such as lawyers, actuaries, benefits consultants, compensation specialists, ERISA and technology practitioners, former private-sector compensation and benefits administrators, and former government officials.
Contacts
- Robert M. Siper
+1 212 547 5750
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