The single most powerful way to manage executive pay is to have a robust succession plan – truly understand the supply of talent and the demands of talent will level out.
We have seen that:
- over more than 25 years
- across the world
- in every industry
- in businesses at every stage of their growth
We see succession from the perspective of companies under and over-achieving in this important area. The impact is striking. We’ve all seen the effect on company share price of an unexpected vacancy or a surprising appointment.
Increasingly the remits of the Nominations Committee and Remuneration Committee are overlapping, and in a dynamic world where Boards have wider responsibilities to all stakeholders, with reputational stakes the highest they have ever been, it’s not difficult to see why.
For instance, linking senior pay to ESG targets highlights the need to have an ESG competent Board in the first place. Paying due attention to the need for a truly diverse workforce and the policies that facilitate that, means that diversity must start at the top.
Succession planning and compensation decisions are inextricably linked
Resulting in positive or negative reactions from the market. Our experts use their in-depth experience of years working with Boards to help navigate and support the leadership strategy agenda - for the planned and the unplanned.
As a result, we have a great many lessons learned, and we work with our clients to pass on what we know, and what we know others have signally failed to accomplish.