Friday, March 12, 2010

Credit the late Jack Bond for Innovating the Longevity Incentive

It seems some folks around the country have been intrigued about how the Tourism Development Authority in Durham came up with the idea of making what amounted to 8% of my compensation over the years a longevity incentive.  So here is how it happened.

When I came to Durham, even though by that time I had nearly two decades of destination marketing management under my belt, I worked without a customary letter of agreement for the first few years until I had proven myself. 

During the discussion of the initial agreement, the TDA employed a best practice formula from a national association of one month of pay for each year served should the agreement end, up to a certain limit.   It is considered fair because community marketing can be very political and mined with special interests.

Jack Bond

I was blessed in Durham in jumpstarting DCVB to team with both an excellent City and County manager, Orville Powell who is now a professor in the Midwest and the late Jack Bond who passed away in 2001 and in shown in the photo above. They really grasped the potential for DCVB’s mission to generate non-resident revenue for the City and County and each bent over backwards to make us successful.

When Jack retired as County Manager in 1991, he served terms on the Tourism Development Authority (DCVB’s governing board) while in private business and during stint as Deputy Chief Auditor for the State.   

It was Jack, quickly endorsed by other Authority members,  who suggested that the severance be re-articulated into an earned longevity incentive instead of just the typical parachute for when an executive is fired.  Actually I've learned since that severance covers a lot of meanings like this, not just when you "get" severed.

Jack and other Authority members saw that I was a good fit for Durham and while they knew how much I love this community they also didn't believe it was fair or smart to take take that for granted.

So they installed the longevity incentive in my employment agreement predicated of course on my meeting some stiff performance requirements and forgoing any employment with competitors.  It worked and I worked hard to earn it, just completing a supercharged 20.5 year relationship.

It wasn’t the TDA’s only innovation.  Working with an HR expert, they implemented a performance based compensation plan 10 years ago.  Under that plan up to another third of the CEO's compensation is put at risk each year and calibrated to performance.  The CEO then  employs this with all other staff but the percentage at risk varies.

DCVB owes its remarkable marketing success to two pillars…research and innovation.  And the TDA has also been not only innovative but thoughtful and conservative and fair when it came to matters of compensation.  The longevity incentive was just part of that.

Even though the longevity was earned over two decades, it made good sense for DCVB and for me at the end of my tenure to pay it out over five or more years.  I would have argued for that regardless of the current short term budgetary impacts.

And anyone who knows how intense destination marketing can be and that I practiced it at an even higher level of intensity, knows I probably made $8 an hour when all was said and done and loved every minute of it.

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