Remuneration report – Percentage change in CEO pay vs comparator group.
The Remuneration regulations require a comparison of CEO salary, taxable benefits and bonuses with all employees or a comparator group of the company’s choice.
In choosing the comparator group, are companies using a group that receives similar benefits to the CEO so it’s on a like-for-like basis – and does this mean the group is relatively small? Alternatively, if companies are choosing a larger group i.e. UK population, does this mean the comparison may not necessarily be on a like-for-like basis as not all employees in the group will necessarily receive benefits or annual bonuses?
We used a comparator group of the most senior managers in the company who share a similar incentives structure. We did not state how many people this covered but it was small No negative feedback
We used all HO personnel (remuneration advisers suggestion at the outset). We did look at other comparators (e.g. all employees and all group management over a level), but hit issues with benefits not being alike and also if you have international operations, pay/benefits will vary considerably. Important to select a comparator group and stick with it as you have to use the same base year on year. The comparator group used was not raised as an issue by any shareholders or reporting bodies.
We used UK senior management as our comparator group. This was a very limited number of management but the only group with like for like benefits and meaningful comparators across the global group. We did not receive any negative feedback on this from shareholders or institutions.
Our issue was getting hold of data we felt confident in. Having looked at the data available, we selected the plc staff (ie those people employed by the holding company)as the comparator. This did mean that the comparator group was relatively small but as the plc staff is mostly made up of senior people who have similar benefits to the CEO, the comparator figures did look pretty reasonable.