Boardroom Governance with Evan Epstein

Robin Ferracone: "The U.S. Lags Other Regions In Terms of Using Stakeholder Measures in Executive Compensation"

Aug 5, 2021

Robin Ferracone, Founder and CEO of Farient Advisors and author of 'Fair Pay, Fair Play', shares her career journey from Indiana to the forefront of executive compensation. She discusses the evolution of executive pay, the need for U.S. companies to adopt stakeholder measures, and the significance of human capital in today's corporate landscape. Ferracone critiques 'moon shot equity grants', highlights the Exxon Mobil proxy fight as pivotal for corporate governance, and emphasizes aligning executive compensation with social and climate goals.

47:26

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Episode guests

Robin Ferracone

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Quick takeaways

Robin Ferracone emphasizes the shift from management-driven executive compensation to board oversight, driven by regulatory changes and activism.

The podcast highlights the need for U.S. companies to integrate stakeholder metrics into executive compensation, addressing growing institutional investor demands.

Deep dives

Career Path and Founding Ferient Advisors

The speaker discusses Robin Farrakoni's career trajectory, highlighting her transition from science to business and her eventual move into consulting. After earning her MBA from Harvard, she launched her consulting career at Booz Allen, where she gained diverse experience across industries. Subsequently, she co-founded SCA Consulting, focusing on the implementation of strategy through executive compensation, leading to its eventual sale to Mercer. After several years at Mercer, she established Ferient Advisors in 2007, emphasizing a link between executive compensation, performance, and corporate governance.

Intro

2min

Journey from Indiana to Consulting Expertise

3min

Evolving Executive Compensation and Stakeholder Engagement

23min

Navigating SPACs and Corporate Governance

11min

Influential Reads and Personal Reflections

3min

Mentorship and Personal Growth

5min

Intro.
(1:08) - Start of interview.
(1:42) - Robin's "origin story": she grew up in Indiana, "sought warmer weather" so she headed to Duke for college. She later got an MBA at Harvard and started her consulting career at Booz Allen in SF. Five years later she started her own firm, SCA Consulting, focusing on executive compensation and strategy, based out of L.A. She sold that firm to Mercer in 2001, stayed on with the firm until 2007 when she left to start her current firm Farient Advisors.
(5:50) - "In the SCA days, executive compensation was commissioned by management, very rarely by boards of directors."
(7:20) - Her take on the evolution of executive compensation since the '80s.
(10:28) - Her description of her firm Farient Advisors.
(12:07) - Her discussion of her firm's research study: "2021 and Beyond: Global Trends in Stakeholder Incentives" authored jointly with the Global Governance and Executive Compensation Group (GECN Group).
(15:16) - Her experience on how to link stakeholder goals in executive compensation, particularly in connection to climate change, social matters and DEI.
(24:37) - Her take on "moon shot equity grants" ("I am not in favor of them") and founder top-up grants.
(28:43) - Her take on SPACs.
(32:40) - Her take on the Exxon Mobil proxy fight with Engine No.1. "It's a watershed moment for corporate boards."
(36:37) - Her take on human capital "it's time has come." "It's much more about people than it's ever been before." There are four areas of disclosure: 1) number of employees, 2) diversity, 3) profile of the workforce, and 4) retention of workforce.
(39:34) - The book that has greatly influenced his life:
1. Fair Pay, Fair Play: Aligning Executive Performance and Pay (2010), her own book! "It consumed my life for a year and a half."
2. Aesop Fables. Collection of fables credited to Aesop, a slave and storyteller believed to have lived in ancient Greece.
(42:03) - Her mentors: "I have a view that you can literally learn for anybody."
(44:29) - Her favorite quotes: "my favorite sayings have to do luck." Her father-in-law: "Luck is where you look for it."
(45:04) - An unusual or absurd habit that she loves: fro-yo!
(45:29) - The living person she most admires: Misty Copeland.

Robin Ferracone is the Founder and CEO of Farient Advisors. She is the author of the book “Fair Pay, Fair Play: Aligning Executive Performance and Pay” and is a frequent presenter for well-known organizations including Council of Institutional Investors, Society for Corporate Secretaries and Governance Professionals, the National Association of Corporate Directors (NACD), and The Conference Board, among others. Robin has written extensively on the topics of performance management, incentive plan design, goal setting, and corporate governance.

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Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License