Enabling the compensation committee of the board of directors

Professionalism and market knowledge are key prerequisites for the successful implementation of the corporate strategy

A company’s board sets the business direction and regularly reviews the strategic progress. On this basis, the annual budgets and performance targets are set, it is ensured that the remuneration arrangements effectively contribute to the implementation of the corporate strategy and actually reflect the performance delivered in each case.

By definition, the compensation committee of the board ensures that the compensation policy throughout the company is appropriately designed as well as in line with the company’s strategic goals and also makes sure that the executive board receives a target-oriented compensation. Thus, the compensation committee is responsible for the development and implementation of the general compensation principles as well as for their successful application and submits corresponding recommendations to the full board of directors.

In this context, there are many topics and potential problem areas to be considered, clarified and regularly reviewed or, if necessary, adjusted. When aiming to optimise the remuneration practice in order to make sure it is successfully embedded in the corporate strategy, the following issues must be addressed:

  • How does the board of directors cooperate with the compensation committee?
  • How should the compensation committee interact with the CEO, CFO and Head of HR?
  • What are the duties of the compensation committee and how are they managed?
  • How is the annual agenda of the compensation committee structured?
  • What should be observed with regard to the Swiss Code of Best Practice and the Ordinance against excessive remuneration in companies listed in the Swiss Performance Index?
  • Is the compensation of the board of directors in line with the corporate strategy and with the market environment?
  • What are fundamental considerations and current aspects to be taken into consideration regarding the compensation of the executive board and the board of directors? What trends are emerging?

Based on their many years of experience and daily insights into the working methods and remuneration systems of numerous companies and organisations in a wide range of industries, the remuneration experts at klingler consultants repeatedly find that there are very different implementation practices of the Ordinance against excessive remuneration in companies listed in the Swiss Performance Index with regard to executive and board remuneration. There is often a lack of clarity and a remarkable uncertainty in these issues.

When it comes to aligning or preparing companies for today’s and tomorrow’s business needs from a remuneration policy perspective, competence in the compensation committee is crucial. Only professionalism and a sound market knowledge in all areas of remuneration strategy combined with practice-oriented know-how and best-practice expertise lead to sustainable success!

Do you also wish to obtain certainty in remuneration issues, to ensure that your remuneration agreements contribute to the implementation of the corporate strategy and successfully reflect the services rendered?

Would you like a professional review of the compensation system, the related cooperation between the board of directors, the compensation committee and the management of your company? Would you like to attend a compensation committee seminar or receive an expert coaching tailored to the needs of your company? – Contact us today, we look forward to answering your questions and providing you with competent advice!

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