Sample Statement

FoxHill

Compensation Philosophy Statement

(Sample)

FoxHill compensation philosophy has one overarching goal: rewarding employees for driving outstanding business performance. This goal will be accomplished by rewarding exceptional performance with above market compensation when outstanding business results are delivered. FoxHill compensation strategies will be highly differentiated with Pay for Performance being the primary philosophy.

FoxHill is committed to providing high-quality compensation and benefits programs in order to attract and retain superior talent. We want our employees to be able to provide a meaningful standard of living for themselves and their families, help secure their health and well-being, and plan for a secure financial future.

Our pay programs will focus on rewarding employees who contribute to the fulfillment of our business objectives, which include: (a) steady growth of sales revenue, (b) maintenance of positive and improving margins, (c) careful management of expenses, and (d) retention of our customers through excellent service. Ultimately, our ability to provide significant compensation for our employees is tied to our ability to contribute to the creation of value for our clients.

In order to accomplish this, FoxHill will utilize the following compensation components:

  •           Base salaries – Salaries are targeted to fall near the 50th percentile of the market (compared to companies of similar size, business scope, and growth posture in ________);
  •           Short-term incentives – FoxHill offers annual bonuses tied to a percentage of an employee’s salary or overall company profits that compete favorably with those offered within other similar firms. FoxHill targets incentive pay at the 50th percentile against peer benchmark data.
  •        Long-term incentive plans – Where appropriate, Long-Term incentives are offered to those employees, primarily at the senior level, whose job duties relate to the development and/or preservation of long-term value;
  •        Benefits plans – FoxHill provides core benefit programs comparable to market norms and capable of providing employees with meaningful levels of security for themselves and their dependents.
  •           Retirement Plans – With our defined benefit retirement program, FoxHill leads the market in terms of retirement benefits. Company contributions towards employee retirement help our employees to prepare for the future.

FoxHill is a relatively small company and, thus, cannot provide every type of compensation program that might be provided in large company environments. In addition, the size or amount of pay elements may not always be competitive with every peer company. However, FoxHill’s culture is also an important part of the overall value proposition offered to employees. FoxHill is determined to offer an environment that encourages personal development, adequate free time, flexible work scheduling (where conducive to the job duties) and opportunities for professional growth. FoxHill employees should take the value of these intangible benefits into consideration when evaluating the overall worth of the FoxHill’s job experience.

Overall our pay programs reflect fixed or guaranteed elements (e.g., salaries and benefits) along with variable or non-guaranteed elements (short- and long-term incentives). The incentive plans are a crucial element of FoxHill’s Pay for Performance strategy. These “at risk” elements provide the strongest link to FoxHill’s business plan. Annually, or more often as needed, FoxHill’s leadership will emphasize and communicate to employees the most important areas to focus on in order to achieve the business plan objectives. FoxHill will structure the incentive plans around these areas. For example, in a given year FoxHill may emphasize revenue growth, margin expansion, new client acquisition, client retention, certain profit goals, or other key metrics of business performance. FoxHill will tie incentive payments to these key indicators to ensure that employees will understand precisely the linkage between Pay and Performance. The financing for FoxHill’s incentive plans will come from the achievement of the desired business results.

No employees are assured of receiving incentives in any given year. The nature of our business can lead to unexpected revenue reductions. These periods in our business cycle may result in the need for shareholders and employees alike to make sacrifices in order to serve our customers and provide for the long-term stability of the firm. At the same time, in profitable years we recognize the contributions of valuable employees and stand firmly committed to share our financial success.

As stated above, our compensation and rewards programs are intended to help employees meet their cash flow, security and wealth accumulation needs. FoxHill will do its best to communicate how its programs are designed to do so. We want our employees to understand each element of pay, see the standards and metrics for achievement as being believable and consider the overall value of the pay programs to be meaningful to them. In this sense we are striving to create a unified financial vision between shareholders and employees to operate and grow our company successfully.