Companies recognise they need to be more modest and conservative when setting their executive reward strategies, according to research by Mercer Human Resource Consulting. 

Richard Lamptey, principal at Mercer, says: “While executive reward packages continue to attract attention and their increase rate outstrips those awarded to other employees, pay increases for senior managers have been fairly consistent over the last couple of years and have stabilised considerably compared to five years ago. 

“This stability is due to a number of factors, particularly the advent of stronger and better-informed remuneration committees. Media and shareholder scrutiny, increased disclosure requirements and the pressure to control costs have also played a part.”

The survey also found the majority of bonus plans used a combination of financial and non-financial measures, most often with a balanced split of 50:50.   

 “Remuneration committees are definitely paying more attention to public perceptions of executive pay practices.  Companies now make greater effort to contain potential excesses, and give plenty of explanation where greater awards are necessary to attract and retain the high-calibre individuals that are crucial to success,” Lamptey added.

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