Executive remuneration is a sensitive, challenging issue in any company, whether public or private. There are countless questions linked to this issue and it requires systematic management and building of clear, specific programs for rolling out the remuneration processes. Our structured process creates linkage between the senior executive and the organization’s strategy. It helps set expectations between the senior executive and the stakeholders within the company, ultimately improving its performance.
EXECUTIVE REMUNERATION IN PRIVATE AND PUBLIC COMPANIES
Private companies are not required to adopt a remuneration policy, however it is appropriate to examine this issue and build a clear policy and strategy, which will strengthen the link between its business success and the remuneration of its executives and leading cadre. This remuneration helps retain the existing talents within the company and motivates the executives to be proactive.
To accomplish these targets, a balance needs to be struck between the various needs of the company, including coping with the competition for human capital, increased regulation, tax considerations and accounting constraints, changing business needs, long-term goals and the company’s business and managerial world view.
Public companies are required to approve the remuneration policy in accordance with Amendment 20 of the Companies Law. Executive remuneration in a financial corporation may be subject to additional requirements. This is true also of institutional entities and banking corporations.
BUILDING SPECIFIC REMUNERATION PLANS:
HOW DOES THIS WORK IN PRACTICE?
Supporting Management and the Board of Directors throughout the entire process
Supporting senior management, the remuneration committee and the Board of Directors throughout the entire process of forming the remuneration policy, according to the regulatory requirements.
Building decision-support simulations regarding the composition of the remuneration
Based on calculation of the legally required indices, among them the ratio between the salary cast per role and the salary cost of the rest of the company employees and contractor employees, the ratio between fixed and variable components and preparation of decision-supporting simulations regarding the composition of the indices and evaluation of the remuneration targets.
Forming a remuneration policy
Besides the legal requirements, the remuneration policy will be based on a set of considerations such as: the owner’s and management’s concepts, the business goals and targets, the company values, the need to connect between the company’s performance and the remuneration of the officers for quality executive recruitment and retention, stimulating the motivation and aspiration to exceptionalism in the company, internal fairness, equalizing with what is commonly accepted in the market and so forth.
Total compensation Benchmarks against what is commonly accepted in the relevant market.
Preparation of a comparative report on the remuneration package of the company office-holders relative to a reference group, which shall be specified according to the company’s characteristics.
Over the years we have created and participated in the building tens of senior executive remuneration processes. Our experience is translated into ability to understand and reflect the standpoints of the owners, the Board of Directors and management and to integrate between the range of relevant entities to reach a decision on this issue.
We create the engagement model best suited for you – anything from a handful of consulting meetings on a specific issue through to full-scale partnership and building an overall work plan. Read more about us
לפרטים נוספים ולקביעת פגישה – צרו איתנו קשר ונחזור אליכם בהקדם