Executive Compensation: Focus on Performance and Communication
Since 2007, managers’ pay at SMIM constituent companies has been closing the gap with the remuneration earned by executives at SMI companies; and it is outpacing the rate of increase at small caps. Share-based compensation is becoming a more important factor at large- and mid-cap enterprises. Variable compensation goes up if the company has performed well – and it decreases when the results are poor. Communication with shareholders has gained in significance. These are the findings of the study entitled “Executive Compensation & Corporate Governance: Insights 2016” conducted by PwC Switzerland.
Read the online version of the study here.
You can find more information here.
PwC and the National Association of Stock Plan Professionals (NASPP) are pleased to release the 2015 Global Equity Incentives Survey (GEIS) Executive Summary. Our survey is one of the most comprehensive studies available on the design and administration of equity incentive compensation plans for multinational companies.
Our 2015 GEIS illustrates interesting trends and news from the marketplace. Our 2012 survey showed a return to the basics after periods of economic boom and bust. At that time, companies were heavily focused on compliance and reacting to pay for performance requirements/expectations. Our 2015 results are reflective of the continuation of globalization. Not surprisingly, our 2015 survey clearly shows that our participants (virtually all U.S. multinationals) have expanded their reach of equity grantees more globally than ever before.
To access and download the executive summary, please click here.
We hope you find the results from the 2015 survey useful as you evaluate and compare your employee equity plans to those of your peers and design plans that are effective drivers of the behaviors necessary for your company’s success in this global economy.
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.
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.