Johanna Sommarlund

Helping her clients think beyond compensation being 'just money', structure simple bonus systems and prepare them for what the new generation coming into the workforce are looking for in an employer, BSc in Business and Economics alum, and Partner at Novare Pay Consulting loves the challenges she gets to tackle each day as a consultant.

Describe your role and what it is that you do overall and on a day-to-day basis.

I am a Partner at a niche management consulting firm specializing in compensation-related topics, which covers everything from benchmarking salaries to designing new types of equity-related incentive programs, to advising institutional owners on emerging trends in corporate governance related to pay. Since I started at the firm in 2015, we have grown from a tiny 4 people team to 35 this year, which is very exciting! Day-to-day I manage a handful of key accounts but also support my colleagues in the areas that I specialize in within their projects. A big part of my job is to ensure that the firm stays on top of all trends and market developments, which means I also do a fair amount of research and host round-table discussions/seminars.

What inspired you to work within compensation advisory? What excites you about your work?

The complexity of the compensation topic is what drew me in; I originally started as an analyst alongside my studies at SSE – and was hooked after getting more insight into the projects. You might think that compensation is “just money,” but the intersection between cost management, strategy, financial instruments, stakeholder and shareholder management, as well as the emotions (and political/media interest) connected to that money, presents some very interesting challenges! What keeps me excited is also the constant evolution of market practice. Right now, I discuss the impact of increasing ESG-focus with my clients a lot, and how it can be incorporated into compensation models and policies.

Where do you see your field going in the next 5-10 years?

I think there are two significant developments. Firstly, we can see a shift in the way younger generations see compensation, or really what you would define as the “employer proposition.” As employees, we no longer focus on just what we get on our payslip, but we value things like flexibility, new types of benefits, personal growth, and how we impact society through our jobs. Secondly, institutional owners that represent us – like the huge pension funds, are pushed more and more towards an active ownership role. We expect these strong actors to drive behavior and policies that are important to us. The most prominent example right now is perhaps the linking of executive bonuses to environmental sustainability targets, but in a broader context also topics like equality and supply-chain responsibility.

What would you like to see improved in large corporations when it comes to salaries, benefits, and incentive programs?

When I talk to institutional owners, investment companies, or other shareholder representatives, the one common factor is always that they wish they understood the variable pay structures (i.e., bonus structures) better. For a long time, variable pay for executives was dominated by complicated and intricate share-based programs that were designed to drive very specific behaviors. Most of these end up being impossible to track, take hours and hours of internal admin, and might even drive all the wrong behaviors. In the worst cases, bonuses and equity programs essentially lose all value for the employees as nobody really understands how the outcome is calculated. In sum, simplicity.

How did your time/education at SSE help guide you to the career journey you have embarked on?

I got in contact with Novare Pay Consulting through a classmate who stumbled upon an analyst job offer. In that way, SSE directly connected me with the career I have today. More importantly, however, as soon as we started having case-pitches in my management lectures, I knew that consulting was my cup of tea. In many ways, the case studies we had, and the management theory I learned, still support me in my discussions with clients today.

Following your time studying, do you have any words of wisdom or advice you would like to share with our current students?

It sounds like a cliché, but what sometimes can seem like dusty old theory, and formulas you need to just cram into your brain, are much more applicable in your career, at least more than what I had imagined they would be. A part-time job alongside my studies helped me understand how my courses were relevant in the “real-world” – and it made those late nights studying a lot easier.

What are three words that sum up your time at SSE?

Challenging, fun, and late nights (both in the library but also in the Rotunda)!