The directors’ remuneration report regulation changes as issued by the United Kingdom Department for Business, Innovation and Skill are set to come into effect after 30 September 2013.
An interim remuneration or compensation consultant will often play an important role in the decision making process of remuneration policies. So, in light of the upcoming updates to the reporting of such procedures, it is valuable for employers to have a specialist in place who can deal with the changes that the regulatory alterations could bring to their business.
An overview of legislation changes
To address current problems in executive compensation, benefits and pay, the secretary of state for business, innovation and skills Vince Cable has announced comprehensive reforms to remedy current failures.
The legislation changes include:
- The current remuneration report will be split into a policy report and annual report on remuneration.
- The annual report must provide remuneration information for the period and following year. It must also be subject to an annual advisory shareholder vote.
- The annual report should also contain a ‘single figure’ for every director.
- A binding shareholder vote must take place in the first financial year.
These changes have been made in response to a perceived lack of correlation between rising executive pay and performance. The new processes instead aim to make reporting more transparent in order to restore the link.
What to expect from your compensation consultant
A compensation consultant is responsible for analysing compensation programs and assisting in the development of well-tuned procedures, including policies regarding executive compensation.
If you are currently looking to recruit an interim compensation consultant for your business, look for candidates capable of performing the following duties:
- Data supply – a compensation consultant should be able to collect market data in order to perform a successful competitor analysis and provide you with pay surveys.
- Policy advice – based on their industry knowledge and data gathered, they should also be responsible for providing solutions on ways to improve your current compensation policies.
- Plan design advice – look for a professional with a rich knowledge of different types of plans who will be able to offer clear advice on which design would be best for you to implement. You may also want to find a candidate with experience in helping businesses implement policies.
Through recruiting an expert compensation consultant, you can gain access to unbiased advice from an independent party, which in turn gives you the opportunity to update compensation processes. It also allows you to check that your executive compensation policies have a clear correlation between pay and performance, which could prove incredibly valuable once the directors’ remuneration report regulation changes come into force.
Hiring the right compensation consultant
Whether you are looking to hire an interim compensation consultant or have full time vacancies for a head of reward, compensation analyst or benefits officer, Portfolio CBR can provide you with specialist recruitment support throughout your campaign.
Contact us on 020 7650 3190 to find out more about the recruitment services we offer.