Nowhere is your organisation’s reward strategy more visible than in the package you give to your most senior employees. With so many years of experience of working with Remuneration Committees and designing executive packages in a regulated environment, Managing Director Paul Bissell is ideally placed to help you define and deliver your Executive Reward Strategy.

Working closely with the Board, Remuneration Committee and your most senior executives, Paul can ensure that your Executive Package is fit for purpose, incentivises the right performance and is fully aligned to your strategic business plan.

Pay

What is the correct market rate of pay for your organisations CEO or any executive for that matter? The answer to that question will always be that it lies somewhere in a range and the actual amount will depend on a number of factors, some of which are listed below –

• The size of your organisation
  
• Whether it is in the public, private or not for profit sector
  
• The specific industry sector you are in
  
• What stage in the business cycle you are in (start up/growth/consolidation/reinvention)
  
• The size of the job
  
• The skill and experience of the individual
  
• How important it is to attract or hold onto the individual
  
• How long they have been in post
  
• What others doing similar jobs in similar organisations are earning
  
• The reward strategy of the organisation
  
• The executive remuneration strategy
  
• The relationship between the fixed Pay element and the variable Incentive Plan element
  

Paul’s extensive experience of job evaluation and job sizing methodologies coupled with his knowledge of salary matching and market benchmarking at Board and Executive level, will enable your Remuneration Committee to have confidence when making these difficult decisions.

Annual, Medium (MTIP) and Long Term (LTIP) Incentive Plans

Interest in what senior executives are paid, from institutional investors, analysts, the National Association of Pension Funds, the Association of British Insurers, the FSA, Government, the media, shareholders and the public, has never been higher.

How can we help you design plans that really work? Plans that stand up to scrutiny? Plans that incentivise and motivate? The following questions are illustrative of some of the key issues that we can help you work through in order to establish your executive incentive plans.

Does your organisation continually struggle to balance the 3 most common strategic dilemmas?

Most organisations, even those in the public and not for profit sectors will have issues about at least one of these dilemmas. How well do your incentive plans reflect the business strategy?

What elements should you include in the Annual versus the MTIP or LTIP? Clearly overall business performance has to be at the core of both plans but you will also need the right mix of individual and business unit measures as well as key business metrics or targets in order to be able to balance the needs of the business today, against the need for sustained performance.

What form of relativity will be used? Without relative measures there is a danger of over/under bonusing. How can you ensure this does not happen whilst at the same time having a design that is robust enough to stand up in unexpectedly challenging or benign market conditions?

How well aligned are the incentive plans? Plans need to reflect the culture, brand values and remuneration practices of the whole organisation. Without this alignment stakeholders are unlikely to support the plans.

Who assess performance? Business performance measures tend to be broadly absolute in nature. People are somewhat different. Who will be assessing the individual performance/contribution of key executives? What process will they use? How skilled are they at performance management at a senior level?

Are your plans compliant? Do they meet all the legal and regulatory requirements? Are they structured in a way which is consistent with being non-contractual? Are the rules well written, clear and understood? Is everyone clear on who participates and why?

Finally, how much to pay? This needs to be based on internal and external comparability. Understanding the relative job sizes, market rates and the fixed/variable mix, all have to be considered in order to arrive at threshold, target and maximum bonus levels.

Building executive incentive plans is complex and that is where Strategic Reward Solutions can help. From designing executive plans to reviewing and refreshing existing ones, we have the expertise to help you with this high profile aspect of remuneration.

The Remuneration Committee

The support that Strategic Reward Solutions can provide does not stop with designing pay and incentive plans for executives. We have extensive experience of the following key aspects of the management of executive remuneration -

• The Remuneration Committee – establishing RemCo Terms of Reference, advising and drafting papers and reports, supporting the RemCo Chairman at AGMs and responding to investor/media queries
• Executive benefits – such as; pension provision, car allowance and healthcare
• Executive contracts – service agreements, buyouts and severance arrangements
• Directors’ Remuneration Statements – drafting and agreeing the content that will go into the Annual Report and Accounts