If there’s one Board topic that easily generates controversy, and can lead to adverse publicity, shareholder revolts and even resignations, it’s remuneration.
As a consequence the pressure on the Chairs of Remuneration Committees (RemCo) is intense, and as we experience from Fidelio’s Search and Evaluation assignments, the “Hot Seat” shows no sign of cooling down.
We were therefore pleased to host a Fidelio Board Breakfast on the challenges of the role, joined by Ruth Cairnie, Chair of the Rolls-Royce and Associated British Foods Remuneration Committees, as well as a select group of RemCo Chairs from a range of sectors and geographies.
The discussion was practical and broad ranging. The 10 key themes of the Fidelio Board Breakfast were:
- The Challenges facing the RemCo Chair
- Practical Guidance for RemCo Chairs, including:
- Choose your organisation carefully
- Manage difficult situations by having an effective early warning system
- Look at each decision in the round and from all perspectives, and discuss it early
- Sitting in the hot seat is much easier if you have a track record of moderate outcomes
- Do the groundwork thoroughly, and, remember, there is no ‘right’ answer
- Building Trust with Increasingly Assertive Shareholders
- RemCo Chairs in the Firing Line
- Impact of Pay Ratio Reporting
- Retirement and Beyond: impact of recent FRC Guidance
- Issues for Private versus Quoted Companies
- Breaking the Benchmarking Spiral
- Gender Diversity in the Role
- Please note, of all Committee Chair roles, Remuneration Committee has the highest female representation – also reflected in the attendance of this Board breakfast!
- What Background does a RemCo Chair need?
For further details of how leading RemCo Chairs are interpreting the regulatory and societal shift in expectations regarding remuneration, as well as practical guidance, click here.