Global Remuneration Trends: A Recap of the ENG Compensation and Benefits Conference
It is always a privilege chairing this annual conference and this year in Berlin was no exception. Designed as a fully hybrid conference—allowing in-person and online participation—it would be fair to say that the technology challenges are real, while at the same time, travelling to Berlin in person is not a trivial matter. Despite the challenges, we learned a lot from one another and ‘hats off’ to those who came or dialled in.
In summary, flexible working is here to stay. That is easy to say but far more difficult to bring about in practice. The companies who will be making it happen were at this conference to tell us the details. It is an awesome challenge, but they recognize the shift has already begun.
The issue of remuneration is now an even hotter topic, in part due to this shift. If we are to benchmark our staff, who do we benchmark them against? A common theme was the need to ‘anchor’ staff to one office location, despite the fact that many employees can work anywhere. In many cases it means we need to revisit geographic differentials, new contracts, and in all cases, some level of revised and more frequent employee communications.
The emerging status quo employees now face (a potentially toxic mix of uncertainty, new rules, lower levels of social contact, challenges of ordinary life) demands wholly different standards of benefits offered by companies (family support, flexible PTO, etc). Employees need recognition more than ever before, they need—quite literally—to feel loved and supported. Stress is real, and the companies at this conference showed admirable levels of empathy and understanding about helping employees and their families adjust.
Finally, when it comes to senior leadership, we have some good news from the UK: our latest data on executive pay trends show that companies are heading in the right direction, not just in terms of levelling quantum in relation to performance, but also in terms of many broader and ongoing areas of concern:
- Executive pension rates are aligning with the wider workforce
- Shareholding guidelines for executives are increasing
- Post-cessation shareholding requirement policies are being introduced
- Bonus deferral percentages are increasing
- ESG performance targets are more prevalent
- Engagement with the workforce is developing to include more surveys, forums, etc.
- Gender equality is now a major focus
- Engagement with and the influence of shareholders continues to increase
- Growth in restricted share plans is accelerating
- Pay freezes for boards in 2021 were prevalent
- Share price falls led to reduced value of long-term incentives vesting