Anonymous member· Head of People Analytics, Calibre Software
Posted in Executive Compensation ·
For years my company, a Swiss listed speciality food group of about CHF 5bn market cap, used the same 16 companies both to benchmark executive pay and to measure relative TSR. It was tidy, and it was wrong for both purposes.
The companies we lose executives to are larger and more international than the companies investors compare our shares with. Using one list meant pay data from businesses too small to be a realistic source of talent, and a TSR group that included two conglomerates we barely overlap with.
We now run two lists, 20 names for pay chosen on size and complexity and 14 for TSR chosen on sector and share price correlation, with seven in common. The disclosure takes half a page more. I would be interested in whether others have separated them and how investors reacted.
0 reactions · 3 replies · 5 views
Nadia HaddadCRP
Director of Rewards, MEA, Qasr Holdings
James OkaforCRP, CEP
VP, Total Rewards, Halcyon Financial Group
We kept a single list, deliberately. Our chair's view is that if executives are paid against larger companies they should be measured against them too. I see the logic of separating, but the pay group tends to drift upwards in size over time, and a shared list is a discipline against that.
Dana WhitfieldCRP, GRS
Director, Global Compensation, Meridian Health Systems
The drift risk is real, and we deal with it by rule: the pay group must keep us between the 40th and 60th percentile on a blend of revenue and market cap, tested every two years. Two names were removed at the last review for having grown too large.
