Ordinance on excessive pay: lessons learned from daily practice

This post is also available in: French German

Implementation of the Ordinance against Excessive Compensation (VegüV/ORAb) is progressing well. Find out more about key experience in practice, and read how a balanced say-on-pay system can strengthen a company’s value creation.

Topics of the article

  • More work for AGMs
  • Election of compensation committees and say on pay
  • Information needs for say on pay

Read more here.

Summary

Compensation per se might be less important than issues such as capital structure and dividend policy (which for their part are closely tied to the organisation’s growth strategy), but we’re convinced that systematically implementing a balanced compensation system is a strategic factor in the success of a company.

The new regulatory environment places great demands on everyone involved. For the board of directors and management of listed companies, preparing for say-on-pay votes – in other words drawing up a meaningful compensation report, documentation and arguments for the motions for shareholders – requires a lot of work. Despite this, companies benefit if they adopt a holistic approach, involving human resources, legal, finance and the board of directors at an early stage of the proceedings. A successful say-on-pay system has to be grounded in value-based management and reflected in value reporting. That way it can help management, shareholders and other stakeholders get a uniform understanding of the challenges faced by the organisation and the factors in its success. Ultimately this consensus will result in better, value-creating decisions.

Published by

Robert Kuipers

Robert Kuipers
PwC
Birchstrasse 160
Postfach, 8050 Zurich
+41 58 792 45 30

Robert is a Partner in the People and Organisation Consulting department in Zurich and is head of Consulting in Switzerland. He has more than 20 years’ working experience in the field of human resource advisory, specialising in corporate governance, reward and total compensation design.

He is a member of the PwC Global Reward Leadership team and a frequent speaker at seminars and conferences. In addition, he is a member of the PwC partner pension fund and of the investment committee. Robert is co-author of PwC Switzerland’s annual “Executive Compensation & Corporate Governance” survey .