Remuneration consultants are generally third-party experts who advise businesses on compensation packages for employees, executives and directors. As with many industries there are several interchangeable titles for jobs in the “Reward” sector. The most common job titles include: Executive Compensation, Performance Management and External Remuneration Consultants.
In most situations remuneration consultants are retained when impartial advice is needed to ensure compensation decisions do not exceed normal industry standards whilst also establishing rewards and Remuneration levels do not fall below these standards. In most organisations executives and board members can set their own financial packages so it is often prudent to retain independent counsel to prove to stockholders, stakeholders and regulators that compensation packages are reasonable and fair.
An outsourced Remuneration consultancy will look at the entire package offering from an unbiased standpoint, guided by insight into industry standard. Many modern compensation packages will include wages, stock options and incentives. It can also include substantial deferred payments, severance and special retirement benefits. The diligent Executive Compensation Consultant will also look at the tax implications for the package and work on ways to reward the executive in the most tax efficient way possible.
Consequently, remuneration consultants are an important means of checks and balances. A top executive who is fired from his position for poor performance can still receive millions of pounds in compensation under his contract. Without independent verification that the compensation package was reasonable, it can seem as if a departing executive is receiving an unjust windfall. Such an impression can alarm stockholders, undermine public confidence and serve as a red flag to regulators.
A corporation’s board of directors may hire remuneration consultants when decisions regarding compensation need to be made.
These roles do not merely deal with top-level executives. The role of the External Remuneration Consultant is also to look at employee compensation packages across the whole organisation. This can be in terms of benchmarking rivals or industry standard with a renewed focus on retention. Remuneration consultants can help also help with other benefits, such as the length of time off for maternity leave.
The scope for the role of Remuneration experts continues to grow and will often include:
- Remuneration Governance
- Executive Remuneration Strategy and Implementation
- Broad-based Remuneration Strategy and Implementation
- Incentive Design
- Performance Measurement
- Sales and Remuneration Strategy
- Performance Management
Harvey Sutton are long standing experts in recruiting in the Rewards sector and always have a range of roles within this discipline. Call us today to discuss your next step in your career and we will be happy to help