Manage your incentives issues with clear, independent advice
Since 2001 GRG has been an independent expert provider of comprehensive short-term incentive (STI) and long-term incentive (LTI) review and design services. Our consulting services, advice and recommendations aim to be clear, precise and transparent so that boards can manage incentive issues cost-effectively and strategically.
Incentives: a critical issue for ASX companies
Effective incentives help to focus executives and employees on the results that contribute to business success, and to align their behaviours with shareholder interests. Also, the “two strikes” rules on remuneration report voting makes the design of executive incentives a sensitive issue for ASX listed companies. Thus incentives are one of the most critical remuneration components that ASX companies must get right.
Incentive plans, however, can be highly technical with increasing complex governance and compliance issues to navigate, as well as heightened scrutiny from regulators, shareholders and stakeholders.
Our incentives services
GRG’s services range from reviewing the effectiveness of current incentive plans to full incentive plan design and documentation. To mention but a few, our range of bespoke STI and LTI services include:
- Benchmarking and research of actual and target incentive market practices sourced from GRG’s largest ASX Executive remuneration database in Australia
- Developing incentive plans that focus employees and maximise their motivational impact
- Designing appropriate incentive profiles or mixes of for different organisational levels
- Defining STI plan Key Result Areas (KRAs) and Key Performance Indicators (KPIs) tailored to the context and circumstances of organisations at all levels
- Developing customised LTI metrics that are appropriate to the business context and aligned with shareholders’ interests
- Associations that create a team that can offer private tax rulings to maximise cost effectiveness and create incentives based on TSR Alpha™
- Managing good leaver and termination benefit issues as they relate to incentives
- Managing taxation issues as they relate to incentives
- Change in control provisions
- Return of capital to shareholders provisions
- Managing the issues associated with disclosure of accounting charges, given that the accounting charge is not reflective of actual incentives paid when market measures are used as the vesting condition (applicable to a majority of LTI plans)
Contact us for clear, useful and independent advice on executive LTIs and STIs today.
Recent GRG Remuneration Insights on this topic
Retirement Savings – The Weak Element of Executive Remuneration
For all employees and particularly executives, superannuation fails to meet retirement saving needs and no other element of remuneration focuses on this need. Retirement savings is the weak element of…
Short Term Incentive Fundamentals
The level of understanding of when an STI should be used and how its design features should be constructed seem not to be well understood by many stakeholders. Here we…
Treating “Good Leavers” Badly
One of the surprising findings from research reported in the 2013 GRG KMP Incentives Guide is that most companies appear to be exposing executive KMP who are “good leavers” to…
Prejudicial Media and Executive Remuneration
With the commencement of the two strikes rule (two successive 25% or more of negative votes on Remuneration Report resolutions means that a third resolution needs to be put to…
Key APRA Guidelines
Companies regulated by APRA have been busy implementing Australian Prudential Regulation Authority (APRA), Prudential Practice Guide PPD 511 Remuneration, dated 30 November 2009. Whilst compliance is only required for APRA-regulated…