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Understanding 'The New Standards' in Executive Compensation Equips
Leaders With Blueprint for Designing Effective Pay Structures

New
Book From Towers Watson Expert Highlights Methods for Linking Business
Performance and Executive Incentive Pay

NEW YORK, Jun 02, 2010 (BUSINESS WIRE) --
Companies are paying closer attention to executive compensation than
ever before -- in response to growing scrutiny from shareholders,
the
federal government and others. With stakeholders demanding closer
alignment of pay and performance, boards and compensation
committees are
under intense pressure to ensure that their executive incentive
plans
are well designed and deliver appropriate rewards for achieving
corporate objectives. According to a new book by Towers Watson
(NYSE,
NASDAQ: TW) consultant Richard N. Ericson, companies should
recraft
their incentive pay structures to respond to a dramatically
changed set
of standards and expectations.

In The New Standards: Methods for Linking Business Performance and
Executive Incentive Pay, author Ericson equips compensation and
finance leaders and professionals with a pragmatic blueprint. He
shows
how to create enduring incentive structures that can adapt to a
wide
range of business conditions and market events to provide the
greatest
business impact and maximum return on investment.

The book authoritatively discusses:

* How to design senior management incentive plans that encourage
long-term, high-quality business results

* How basic principles of finance and valuation can be used to select
performance metrics, establish performance targets and calibrate
incentive payouts

* Why companies should use incentive pay for senior management as a
proactive business governance tool specifically designed to
increase
business performance

* Ways to design and stress-test incentives to ensure that they do not
encourage improper risk taking or undue risk aversion

"Every year, companies spend millions of dollars on executive
incentives. All too often, however, these programs provide a weak
link
between pay and performance. Executives may be rewarded for bad
decisions as they are for good ones," said Ericson. "The key to
this
book is the fundamental examples and methods it provides. Based on

timely market data, the book is highly relevant for the
compensation,
finance and board member audience. It provides essential advice
and
tools for linking proper financial goals with incentive pay."

About the Author

Richard N. Ericson is an executive compensation consultant at Towers
Watson, where he specializes in management and reward systems
emphasizing principles of shareholder value creation. He has more
than
25 years of experience in business valuation, performance standard

setting and incentive design. He holds an M.B.A. in finance from
the
University of Chicago Graduate School of Business.

About Towers Watson Executive Compensation Consulting

Towers Watson is the world's largest executive compensation consultancy,

with more than 350 executive compensation consultants in 16
countries
providing advice to over 3,000 clients. In the U.S., Towers Watson

provides executive compensation advisory services to the boards of
27%
of the Fortune 1000 and provides executive compensation services
and data to management in 33% of the Russell 3000, according to
Equilar.
Similarly, in the U.K., Towers Watson provides executive
compensation
advisory services to over 40% of the FTSE 100, according to
Manifest, a
proxy advisory firm.

About Towers Watson

Towers Watson
/quotes/comstock/13*!tw/quotes/nls/tw
(TW
42.07,
+0.63,
+1.52%)
is a leading global professional
services company that helps organizations improve performance
through
effective people, risk and financial management. The company
offers
solutions in the areas of employee benefits, talent management,
rewards,
and risk and capital management. Towers Watson has 14,000
associates
around the world and is located on the web at www.towerswatson.com.

SOURCE: Towers Watson