Executive Remuneration Reviews

Market conditions and market practice are constantly changing requiring companies to continually monitor the levels and the constituents of senior employees' remuneration packages. In addition, corporate events such as mergers, take-overs and reconstructions can all impact upon the appropriateness of executive remuneration.

Halliwell Consulting conducts remuneration reviews for main board directors, senior employees and non-executive directors.

Remuneration reviews are not merely about statistical analysis but include an understanding of the business, the people relationships within the business and the market in which the company operates. This is the special skill brought to the process by Halliwell Consulting.

A typical approach to conducting an executive remuneration review would be:-.

• Establish the existing remuneration policy of the company (assuming there is one!).
• Establish with the board and remuneration committee:-
  • Their views of the current remuneration structure and levels.
  • Who they believe are the correct comparators for the company.
  • Any issues they are aware of.
• Agree the comparators (this process can involve some long discussions!).
• Interview on a confidential basis the participants in the review to establish their views on the above and to ensure a degree of buy-in to the findings of the review.
• An analysis of the information provided by the company and the participants against the comparator information.
• Production of an initial report to the board (remuneration committee) dealing with:-
  • A summary of any issues appearing from the participant interviews.
  • Benchmarking of each element of the participant's compensation (cash, bonus, share incentives, pension and contractual terms) against the comparators.
• By applying the company's remuneration policy (for example median salaries and upper quartile incentives) making recommendations on each element of the compensation package for the participants in the review.
• Negotiation with all interested parties.
• Communication of the findings of the review providing explanations and justifications where required.
• Implementation.

Also see - Remuneration Committe Advisors