Executive compensation

The challenge is clear: appropriate, success-oriented, sustainable, competitive and legally admissible remuneration packages must be devised

The discussion about compensation starts at the very highest remuneration level. More than ever, appropriate and efficiently-conceived compensation for executives and high-ranking managers is controversially discussed in public, not least as a result of the financial and economic crisis. Therefore, against the backdrop of regulatory changes and legislation, like the “Act on the Appropriateness of Management Board Compensation” (VorstAG), the question arises:
“How to design attractive, appropriate, and success-oriented compensation systems for Board members and other senior managers that, at the same time, are competitive and in line with legal obligations?”

Laws and regulations provide only a rough orientation. The detailed configuration is left to the supervisory boards and advisory councils of the companies – with all the ensuing room for interpretation and associated pitfalls.
There is increasing demand for long-term oriented and sustainable compensation systems. Mid- and long-term incentive programs are being created and adopted at short notice. However, the application possibilities are manifold because different factors need to be considered, e.g.

  • duration of the programs,
  • application of a merit rating system (bonus/penalty),
  • amount of partial disbursements,
  • regulations in case of an early exit of Board members and other senior managers, or
  • type of ratios to determine achievement of objectives

Depending on your needs, we develop short-, mid-, and long-term incentive concepts in line with legal obligations, according to appropriateness, performance orientation, sustainability, transparency, and comprehensibility.
We support our customers in developing long-term remuneration concepts through the objective assessment of tasks and responsibilities of Board members and other senior managers, based on defined criteria, and in preparing job profiles for the different positions, and in analyzing the competitiveness of the remuneration package.

Advantage of our approach:

  • development of sustainable remuneration systems for Board members
  • comprehensible procedure is defensible internally and externally
  • achievement of actual market comparability of functions and remuneration
  • alignment with the legal obligations concerning remuneration systems
  • use of objective criteria for viable remuneration decisions