AI Issue 6 2018

14 Acquisition International - Issue 6 2018 Featuring in AI’s Leading Adviser Awards as the Leading Executive Remuneration and Incentives Adviser of the Year within the UK, Mercer | Kepler focuses on providing high-quality tailored and independent advice on remuneration. We invited Amanda Flint to provide us with her opinion in Executive pay in the current climate. he topic of executive pay seems to be in our news on a daily basis. There is constant commentary and debate from a variety of stakeholders, and we see new legislation and regulation appearing around the world in this area. The fact of the matter is that in many organisations, whatever their size, the key to the success of the business is their management team. Ensuring that the business can retain key management talent and recruit new talent when it needs to do so is an ongoing challenge and remuneration has its part to play. Plus, incentive pay has a key part to play in aligning the senior team with the business plan in the short and medium term. The current trend in using incentive pay, whether in the form of short term bonus incentives or long-term incentives are increasingly used by organisations to ensure that executives are aligned with shareholders by: • Focusing executives on Key Performance Indicators (“KPIs”) that reflect the financial performance of the company and benefit shareholders; • Including an element within the KPIs that reflect sustained performance – and rewarding consistent growth under long term incentives; Company: Mercer | Kepler Contact: Amanda Flint Address: Tower Place West, London, EC3R 5BU, UK T: 020 7178 3276 Website: www.mercer-kepler.com Executive Pay in the Current Climate T 1806AI45 • Using KPIs to reinforce good conduct and good culture and so enhancing the corporate reputation of the business brand; • Rolling incentive awards keep executives focused on the business and the fact that they always have something to lose if they leave, encourages strong performers to remain with the business and build value; • There is an opportunity to use reward to assist in risk management – modern plans will contain provisions which result in the forfeiture of current awards and the recoupment of previous awards where there has been heinous behaviour in specified circumstances; • Whether on an exit or during the normal course of business, when awards vest and executives can realise them and benefit in the same way as shareholders, both their interests coincide. Best-In-Class Resources Here at Mercer | Kepler, our best-in-class resources include global data; unparalleled regulatory, legal and accounting research; a governance and shareholder relations; and an executive benefits consulting group. Both our consultants and our clients benefit from ultra-informed decision-marking as a result.