The Complete Guide to Executive Compensation.

• Author: Meuter, Jr., Fred
• Position: Director Library

By Bruce R. Ellig

Published by McGraw-Hill, New York, 598 pages, $99.99

WHEN I GOT STARTED in the compensation field in 1960, a major concern was "Where do you go for answers to the multitude of questions which came up concerning the design and administration of executive compensation plans?" There really were no defined sources. For that matter, a lot of the "rules and regulations" were communicated by word of mouth. Unfortunately, sometimes incorrect information was given in this process.

Bruce Ellig's recently published The Complete Guide to Executive Compensation definitely fills the needs of practitioners and others who have been searching for a reliable source which answers the many questions concerning the basics -- as well as the essential intricacies -- of executive compensation administration and design.

The author has been a trendsetter in the executive compensation community for over 30 years. His innovative work during his long career at Pfizer Inc. is well known. For the writing of this book, Ellig has certainly drawn on his many experiences during his leadership of Pfizer's compensation function and while heading the company's human resources activities.

The Guide is divided into 11 chapters. The author has a logical starting point. He describes in a concise way the executive compensation framework. Even for experienced practitioners, the thoughts and principles covered are well worth reviewing again. For instance, it is still time well spent to review what happens to executive compensation programs as a company moves through its life cycle. The author writes and diagrams on this important issue.

From his discussion concerning the issues and elements of the executive compensation framework, Ellig follows a natural path to examining in detail the four major elements of executive compensation: salary, employee benefits and perquisites, short-term incentives, and long-term incentives. Significant space is devoted to how short- and long-term plans can be created. The "whys" of taking certain design actions are explained and diagramed.

The author's review of long-term incentive approaches should be of particular interest for most executive compensation and human resources professionals. What with the downturn in the stock market, designers are searching for new long-term devices. The reader quickly realizes that there are other instruments besides the stock option which offer long-term opportunities. The subject of long-term...