Top Ten Remuneration Committee Agenda Items for 2012
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Executive pay today is more intensely followed and commented upon than any other management function. While high pay for exceptional talent and performance may be accepted, shareholders are increasingly intolerant of companies that are perceived to provide overly generous executive rewards for underperformance. There are multiple Government discussions and consultations about proposals to increase transparency and shareholder empowerment around pay programs, including a UK High Pay Commission that identified not just the growing disconnect between pay and performance, but the gap between pay for executives and ordinary workers.
The UK will likely be leading the way in strengthening compensation governance, with plans to introduce a binding advisory vote on future remuneration policy that would require the support of 75% of shareholders. With so much set to change, Patterson Associates, a Pearl Meyer & Partners Practice, identified the Top 10 issues facing Remuneration Committees in the UK and discusses how to promote independent decision-making around pay programmes that will support strategic goals.
The Patterson Associates Top 10 Remuneration Committee Agenda Items for 2012 are:
· Understand Your Company’s Pay-for-Performance Linkage
· Understand Total Executive Compensation
· Balance Short-Term and Long-Term Incentives
· Reassess Executive Remuneration Benchmarking
· Don’t Follow the Leader
· Continuously Assess Your Succession Planning Strategy
· Write Clear and Transparent Remuneration Reports for Shareholders
· Develop Open and Constructive Communications with Shareholders
· Maintain Board Independence and Diversity
· Look to the Future
Michele B. Morse Director of Communications