WEBVTT 1 00:00:00.230 --> 00:00:01.440 My name is Dan Kapinos. 2 00:00:01.440 --> 00:00:05.380 I'm a partner at Aon which is a professional services firm 3 00:00:06.280 --> 00:00:08.350 that helps companies in all sorts of ways. 4 00:00:08.350 --> 00:00:10.680 line:15% My particular team focuses on 5 00:00:11.770 --> 00:00:14.350 line:15% how companies pay their employees. 6 00:00:14.350 --> 00:00:15.670 line:15% Specifically, with stock. 7 00:00:15.670 --> 00:00:17.820 line:15% So that tends to be at the executive level. 8 00:00:18.872 --> 00:00:21.290 line:15% I'm sure a lot of people wonder how you can have a business 9 00:00:21.290 --> 00:00:23.280 that focuses on how to pay people, 10 00:00:23.280 --> 00:00:26.220 line:15% but paying people, particular executives, 11 00:00:26.220 --> 00:00:28.670 line:15% is heavily scrutinized so there's a lot of rules. 12 00:00:29.630 --> 00:00:33.280 line:15% Accounting rules, there's a lot of regulatory things 13 00:00:33.280 --> 00:00:36.220 line:15% that come from congress and other parts of the government. 14 00:00:36.220 --> 00:00:38.300 No company wants to be a headline 15 00:00:39.300 --> 00:00:40.820 and companies grow over time 16 00:00:40.820 --> 00:00:43.150 so even small companies start paying attention 17 00:00:43.150 --> 00:00:45.390 to these things very early on 18 00:00:45.390 --> 00:00:48.330 to make sure they don't develop bad habits as they grow. 19 00:00:48.330 --> 00:00:50.190 And it festers into something 20 00:00:50.190 --> 00:00:51.590 that can become very problematic. 21 00:00:51.590 --> 00:00:54.180 So as much I can say, 22 00:00:54.180 --> 00:00:57.803 line:15% it's big, large cap Fortune 100 companies, 23 00:00:57.803 --> 00:01:01.190 line:15% it's all the way through small public companies 24 00:01:01.190 --> 00:01:03.820 line:15% with 10 people and private companies 25 00:01:03.820 --> 00:01:05.650 that are thinking about going public. 26 00:01:05.650 --> 00:01:09.730 My team comes in at various different points in time. 27 00:01:09.730 --> 00:01:11.590 Sometimes that's at the very beginning, 28 00:01:11.590 --> 00:01:14.300 where they're talking about designing a structure 29 00:01:14.300 --> 00:01:15.610 or redesigning a structure 30 00:01:15.610 --> 00:01:18.120 to make sure it hits all the key points. 31 00:01:18.120 --> 00:01:20.470 It aligns with the executives' interests. 32 00:01:20.470 --> 00:01:21.890 It aligns with shareholder interests. 33 00:01:21.890 --> 00:01:23.500 It's still compliant with the law 34 00:01:23.500 --> 00:01:25.630 and the rules that exist. 35 00:01:25.630 --> 00:01:28.020 line:15% But other times, we'll get brought in after the fact. 36 00:01:28.020 --> 00:01:30.220 line:15% After a design's been put out there 37 00:01:30.220 --> 00:01:32.190 line:15% and then they need support in making sure 38 00:01:32.190 --> 00:01:36.030 line:15% that they then administer this plan appropriately. 39 00:01:36.030 --> 00:01:37.500 line:15% Or even reactive. 40 00:01:37.500 --> 00:01:39.630 They made a decision that didn't go well 41 00:01:39.630 --> 00:01:42.070 and now they're looking to change course, so... 42 00:01:42.070 --> 00:01:44.510 If it's designed well, it's pretty robust 43 00:01:44.510 --> 00:01:47.370 that it doesn't require constant redesigning 44 00:01:47.370 --> 00:01:49.653 and constant revisiting every single year, 45 00:01:50.670 --> 00:01:53.450 but that's one of the side effects 46 00:01:53.450 --> 00:01:54.650 of executive compensation 47 00:01:54.650 --> 00:01:56.910 because it's so heavily scrutinized, 48 00:01:56.910 --> 00:01:58.940 perspectives can very quickly change 49 00:01:58.940 --> 00:02:00.490 which means one year, 50 00:02:00.490 --> 00:02:01.600 line:15% we put in place something 51 00:02:01.600 --> 00:02:03.610 line:15% that we thought would work really well 52 00:02:03.610 --> 00:02:05.820 line:15% and set them up for the next 10 years aligning 53 00:02:05.820 --> 00:02:08.530 line:15% with their strategy and then the rules changed 54 00:02:08.530 --> 00:02:09.410 line:15% the following year and we have 55 00:02:09.410 --> 00:02:11.310 line:15% to completely revisit the whole thing. 56 00:02:12.340 --> 00:02:14.070 The process doesn't really end. 57 00:02:14.070 --> 00:02:18.170 It's kind of a constant cycle just to make sure 58 00:02:18.170 --> 00:02:20.620 you're managing all the perspectives you need to.