A FTSE250 Company Secretary writes...
The new Corporate Governance Code stipulates a new requirement that the remuneration committee “should review workforce remuneration and related policies and the alignment of incentives and rewards with culture, taking these into account when setting the policy for executive director remuneration”.
What steps are companies intending to take in order to comply with this provision and get their Board’s comfortable those remuneration policies are fair across the Group?
1. Add these requirements to the Rem Com’s Terms of Reference
2. Factor in this additional work into the Rem Com’s annual work plan (do the required reviews once a year
3. The Company Secretary will be responsible for getting together for the Rem Com’s consideration a summary of remuneration and related workforce policies across the group. Which the Rem Com will then consider for the reasons given in the UKCGC
4. The Company Secretary will also provide the Rem Com with a statement of the company’s “culture”, and will leave it to the Rem Com to work out what on earth “aligning incentives and rewards with culture” actually means in practice!