REMCO REMIT

Chairing the Remuneration Committee of a listed company is complex and challenging. The decisions are vital to the company's success, but they are highly visible and sometimes controversial as seen from the deep backdrop of corporate governance and societal norms.

A minimum need is getting the committee annual cycle settled early. There is also the longer policy cycle and the fast-moving fields of ESG and corporate governance expectations to be considered as well. This takes time and deft stakeholder sensitivity.

Aside from all that, the business will throw extra items into the mix. New capital, M&A or disposal, new hire needs of an odd nature, a good/bad leaver assessment and so on.

In addition, too, the overarching ask is for the committee to be aware of, and sensitive to, the wider scene, both in framing proposals and assessing outcomes. 

Judgement is expected, discretion is permitted but much care is needed. Adjustments to outcomes are seen, adjustment to targets less so - other than on a capital event like a rights issue. 

• Adjustment 

• Judgement

• Discretion

• Malus and Clawback 

 Outwardly similar, but often the most fraught areas of the committee's role.

Shareholder consultation had a strong role too; for items of true substance and then genuine listening is a must. Consultation is neither a rubber stamp, nor is it a decision outsource mechanic.

Done well executive compensation adds huge value. While some are dissatisfied with the process, they have yet to advance a good alternative. 

So, it may be like Churchill said of Democracy:

"No one pretends that Democracy is perfect....Indeed, it has been said that Democracy is the worst form of Government, except for all those other forms that have been tried."  (11 November 1947)

CORPGRO provides training in all these areas and more, get in touch to discuss further. Email [email protected]

Executive Compensation and Incentive Design

Please feel free to email or call:

Damian Carnell - [email protected] +44 (0) 7989 337118

VA Bec Bostock - [email protected]

Please share this CORPGRO information with your board or your colleagues.