Tags: Pay, Remuneration
This Board Briefing offers both practical advice on how remuneration committees can address the challenge and some pointers to possible reform centred around the need to be clear about the value of what is being awarded and the pace at which remuneration is earned. Fairness and simplicity are the two themes which run through this publication.
Executive remuneration is an important driver of behaviour and therefore of the way values are perceived throughout a company. However, current approaches to the way executive pay is set are very complicated with outcomes that are uncertain and a process that is tough for boards to manage. There is a widespread view that the present system in the UK does not deliver the right incentives, and may even be fundamentally broken.
This IBE Board Briefing looks at the difficult and complex task of the remuneration committee.
It aims to help remuneration committees identify and respond to the ethical challenges they face. Fairness and simplicity are the two themes which run throughout.
The Publication suggests that two requirements are paramount. First, remuneration committees must have a clear sense of the value of what is being awarded. Second, remuneration committees need to do more to justify the amount they have set. Along with practical advice, it offers some pointers for reform, particularly around the need not only to be clear about the value of what is being awarded but also the pace at which remuneration is earned.
It offers both practical advice on how remuneration committees can address the challenge and some pointers to possible reform centred around the need to be clear about the value of what is being awarded and the pace at which remuneration is earned.