The Treasurer: Top companies adopt remuneration reforms early
The UK’s biggest companies are making a concerted effort to provide greater transparency around executive pay and align it more closely with their business performance. Sally Percy reports.
These are the findings of corporate communications consultancy Black Sun’s analysis of the annual reports of the FTSE 100.
Nearly half (47%) of the FTSE 100 companies have already either partly or fully adopted the draft reforms on executive pay set out by the Department for Business, Innovation & Skills. For example, 93% of companies (up from 60% last year) include a personal introduction from the remuneration committee chairman, setting out the approach to remuneration. In addition, 35% (up from 23%) give a detailed explanation as to how the company’s overall performance in the year has impacted the level of remuneration awarded.
Almost two-thirds (63%) of companies now link their key performance indicators (KPIs) to executive performance, which is consistent with last year. And this year, 37% of companies provided detailed information on the particular KPIs that impact pay and the weighting they had on potential rewards (up from 17% last year). More companies are linking payment information to both financial and non-financial KPIs (25% of companies compared with 22% in the previous year). A third (36%) of companies just relate remuneration to financial KPIs, while a mere 2% solely link to non-financial KPIs.
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