Executive remuneration and incentive strategy
Who we are
Equity Strategies is an independent specialist in executive remuneration and incentive strategy. We have been at the forefront of this area of business advisory since 1991 when the firm was founded by industry expert, Edward Wright.
Why executive remuneration and incentive strategy is essential
Remuneration and incentive packages need to be commercially sound and effective in encouraging the company's executives and other key staff to perform at a superior level. Developing the right strategy is essential to the success of the company.
The right strategy is essential to:
- Attract and retain key staff within the company
- Incentivise management to perform at a superior level
- Motivate management towards the company's business objectives
What defines a successful remuneration and incentive strategy?
Successful remuneration and incentive strategy should meet the following criteria:
- Support business objectives:
The rewards mix should be in line with the company's strategy. - Competitive with the marketplace:
The package should be competitive enough to attract and retain talent. - Cost effective and commercially viable:
The package should be commercially viable and cost-effective for the employer and tax-efficient for the employee. - Be internally justifiable:
The package should be perceived as being fair within the organisation. - Withstand scrutiny:
The package must be able to hold up to scrutiny from the media, corporate governance bodies and other stakeholders.
How we develop executive remuneration and incentive strategies
There are several steps and multiple dynamics to factor into developing a successful remuneration and incentive strategy:
Understand your business
We seek to understand your business: its commercial objectives, culture, values and industry dynamics.
Benchmark the marketplace
We analyse relevant data to produce remuneration figures for executive positions in related companies of relevant market capital, revenue, industry and number of employees.
Define base salary
Salary is defined as fixed cash compensation paid for performing specific job responsibilities. The base salary is used as a starting point to determine other elements of the remuneration and incentive package.
More information about salary strategy
Define short-term incentives
Short-term incentives are typically related to performance periods of up to one year or to the attainment of milestones. They are usually in the form of a cash bonus or a mixture of cash and shares. The amount can be linked to the performance of an individual, business unit, the entire company or a mix of the three.
Short-term incentives can have the strongest influence on an executive's behaviour.
More information about short-term incentive strategy
Define long-term incentives
Long-term incentives typically cover performance periods of several years. The reward amount is usually linked to a performance hurdle based on market measures (e.g. TSR – total shareholder return) or internal measures (e.g. ROE - return on equity). They can come in several forms, including options and performance rights.
More information about long-term incentive strategy
Build in other considerations
Other considerations include tax and legal implications, corporate governance and scrutiny by the media and other stakeholders.
More information about corporate governance in executive remuneration
Who we do it for
We create and deliver executive remuneration and incentive strategies for both publicly listed companies and private companies.
We have worked with many of Australia's top publicly listed companies as well as private companies.
Who to speak to
For a confidential discussion about your needs, please speak to Edward Wright:
Phone: 02 9226 4200