Most boards think they have executive compensation figured out. They benchmark salaries against peer groups. They hire a consultant. They run the numbers past the compensation committee. And then they wonder, years later, why their say-on-pay vote failed or why their top executives are walking out the door to competitors offering packages they didn't see coming.
The consultants who work in this space full-time have a different view. The problem usually isn't the data. It's how boards interpret it.
Frank Glassner has been advising boards of directors on executive pay for more than four decades. As the founder of Veritas Executive Compensation Consultants, he operates out of the San Francisco Bay Area and works with companies ranging from emerging technology startups to established public companies. His clients include compensation committees trying to navigate proxy advisor pressure, say-on-pay scrutiny, and the increasingly complicated task of designing incentive plans that actually drive the right behaviors.
"Boards often confuse market data with strategy," he's said in discussions with compensation professionals. "Knowing what the market pays tells you the floor. It doesn't tell you what to pay, or why, or how to structure an award so that it actually retains the person you're trying to keep."
That distinction matters more now than it did ten years ago.
The Proxy Season Pressure
Proxy advisory firms, ISS and Glass Lewis most prominently, have grown considerably more assertive about what they consider acceptable compensation programs. Their voting guidelines shape how large institutional investors approach say-on-pay votes, which means a compensation committee that ignores them does so at genuine risk.
The Bay Area's tech sector is where this friction shows up most clearly. Technology companies tend toward equity-heavy compensation structures, and equity gets complicated fast. Option pools, RSU vesting schedules, performance-based awards, cliff versus graded vesting, each decision has implications for how proxy advisors score the program, how employees actually experience the compensation, and what the company's dilution looks like over time.
Getting this wrong is expensive. Not just in lost votes but in the human cost of turnover. When a senior executive decides to leave because a competitor offered a more intelligently structured package, the replacement cost, recruiting fees, the ramp-up period, institutional knowledge lost, typically runs between 50% and 200% of that executive's annual compensation. Boards that treat pay design as an afterthought often pay for it later.
What the AI Conversation Is Missing
A more recent source of tension sits at the intersection of executive pay and artificial intelligence adoption. As AI tools move into corporate governance workflows, some compensation committees have started using them to model scenarios, benchmark peers, and draft proxy language.
The problem is that AI benchmarking models are only as good as the data they're trained on. Compensation decisions that affect executives making millions of dollars annually are not decisions where generic outputs from a large language model should replace human judgment from someone who actually understands the company's strategy, its talent market, and the specific people on the leadership team.
Advisors who work in this space have been vocal about this. A recent analysis from San Francisco Download noted that Bay Area boards are increasingly relying on AI-assisted modeling for executive pay benchmarking, often without fully understanding the limitations of those tools. The consultants raising red flags aren't anti-technology. They're pointing out that the people who rely on AI outputs without independent verification are making decisions that could cost their companies a great deal of money.
Frank Glassner's profile on biography.wiki describes him as someone who has built his practice around the kind of detailed, independent analysis that compensation committees actually need, not just market data delivery.
The Governance Dimension
Executive compensation isn't just an HR issue. It's a governance issue.
When compensation structures are designed poorly, they create incentive misalignment that can damage shareholder value over years. When they're designed well, they do the opposite, they tie executive behavior to the outcomes shareholders actually want. That's why institutional investors care so deeply about compensation disclosures, and why proxy statement language has become increasingly important as a communication tool.
California companies face particular scrutiny here. The state's investor base is sophisticated. Pension funds, sovereign wealth funds, ESG-focused investors, these are the kinds of shareholders who pay close attention to compensation proxy disclosures and who vote against directors when they don't like what they see.
San Francisco Bay Area boards, in particular, often operate in a world where the same executives they're trying to retain are being aggressively recruited by competitors who can offer nearly unlimited equity upside. Designing a compensation program that competes in that environment while also passing muster with proxy advisors and institutional investors is genuinely hard. It requires more than a benchmark spreadsheet. It requires strategic judgment about what the company actually needs from its executives, and what those executives need to stay.
Pay Design as Retention Strategy
The companies that get this right treat compensation design as part of their talent strategy, not as a compliance function. They engage advisors early in the process, before they're under proxy advisor pressure. They think carefully about which elements of compensation are retentive versus purely motivational. They consider the full picture, base salary, short-term incentives, long-term equity, benefits, and the narrative they tell about the package.
That narrative piece is underappreciated. An executive compensation program that isn't communicated clearly is a program that doesn't work the way you intended. The executives who receive it don't understand what they're being rewarded for. The board members who approved it can't explain it to shareholders. And when say-on-pay season arrives, that ambiguity becomes a liability.
The consultants who specialize in this work, including those who've been advising Bay Area boards for decades, make the case for an earlier, more strategic engagement with compensation design. The argument isn't self-serving. Boards that treat compensation as a strategy, rather than a compliance checkbox, consistently outperform the ones that don't.
That's a harder case to make than just delivering a benchmark report. But it's the right one.
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