Criteria for Judging Compensation
Equitability: a price/value that serves both parties well.
Adaptability: sufficiently flexible to meet advertiser's changing needs.
Simplicity: compatible with administrative capabilities.
Incentives: rewards for efficiency, productivity and (optional) effectiveness.
Predictability: to assure proper budgeting.
The Process
1. Review Financial History
Review existing or proposed agency contract and financial guidelines.
Obtain pertinent agency historic financial data.
2. Interviews with Key Executives
4-6 interviews at each of Client (senior executives who work with agency; financial managers) and Agency (senior management; department heads; CFO.)
Topics
- purpose of review
- work systems/processes impacting efficiencies
- work duplications
- alignment of expectations
3. Analysis & Recommendations
Analysis:
Costs by categories; trends.
Benchmarks and Comparisons.
Assessment of projections (Pro Forma)
Examination of alternative compensation plans.
Recommendations:
Modifications/new plan(s) as appropriate.
Rationale
Presentation to Client (Agency optional)
(Optional: Assistance in Negotiations)
5. Contract Revisions, as Warranted.
