Board and Executive Remuneration

One of the “hot topics” of today’s public discussion on corporate governance is the remuneration of leaders. Unjustified variable management compensation and multiple unusual payment schemes have been highlighted, essentially in the financial sector where excessive bonus schemes and incentives to take irrational risk have contributed to the world financial crisis. Thus, numerous national and international initiatives have been launched to regulate compensation of board members and executives. Whilst subscribing to these new governing principles, companies need to adopt a healthy and competitive remuneration scheme in order to attract talent that is absolutely critical if they want to hold a sustainable leadership position.

Reviewing and adapting the remuneration policy has become a strategic priority for many corporations, irrespective of their size and their industry sector. The most challenging task is the appropriate remuneration policy for board members and executives, and this is also the area where you cannot afford to get it wrong.

Companies struggle to strike the right balance between paying their leaders according to market standards and recognizing individual performance and long-term contribution. Today, board members have an increased level of responsibility and personal liability, and their workload is substantial. This needs to be reflected in their compensation. At the same time, the design of their compensation must be completely unrelated to the short term business performance. On the other hand, the company needs to offer the right proportion of short term and long term remuneration to its executives.

We advise our clients in their efforts to establish new remuneration policies that are in line with new legal and regulatory obligations. We conduct compensation benchmark surveys, establish peer reviews for specific markets and sectors and provide tailored remuneration solutions, including performance-related compensation, profit sharing schemes, share plans and other executive incentive schemes.

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