This article explores how executive compensation surveys inform strategic business decisions, focusing on aligning remuneration strategies with market trends to attract and retain talent. It highlights the significance of these surveys in developing competitive, transparent compensation packages, underscored by GRG’s expertise in offering comprehensive market insights and tailored advisory services.

GRG Remuneration Insight 156

by Kylee Davidson
12 February 2024

Executive leadership teams play an integral role in shaping organisational success. Having the right people in the seat, incentivised to drive the strategic direction of the company requires a well-informed, considered approach tailored to reflect their unique position. The balance of market demands, employee expectations, regulatory requirements and shareholders (in publicly listed companies) is both an art and a science designed from a strong foundation of robust, reputable market data.

Fortunately, this information is readily available with executive compensation surveys.

Reputable surveys are built on current market pay and practice data for dozens of executive positions across Australia, providing valuable and practical insights for remuneration practitioners to apply to their company’s unique circumstances.

At Godfrey Remuneration Group (GRG), we understand the delicate tensions associated with designing executive compensation packages and the importance of current, accurate remuneration data to inform strategic decisions. With our products and services, we help organisations of all sizes tap into a wealth of information with our extensive executive remuneration database, one of the largest in Australia.

In this piece, we will explore how executive compensation surveys offering a blend of current market data and insightful analysis can empower companies to make informed, strategic decisions about executive pay.

The Evolution of Executive Compensation Surveys

Executive compensation surveys have undergone a remarkable transformation in recent history, evolving from a mere data collection exercise with static outputs to a highly customised tool critical to strategic corporate planning. Such change reflects the crucial nature of having a reputable source of detailed, relevant market information to attract, engage, motivate and retain top leadership talent in a global marketplace.

Once seen as a tool to provide a brief overview of basic market rates, now the best survey tools offer more comprehensive and strategic data to support a company’s need to play in a more complex environment, with increasing globalisation and competitive pressures. In this new era, executive compensation surveys have started to encompass a broader range of variables, including long-term incentives, short-term incentives and performance metrics.

Several factors are amplifying the significance of these surveys in strategic planning, including:

Demand for Transparent & Competitive Compensation Packages

The rise of shareholder activism and regulatory scrutiny has made transparent and competitive compensation packages a necessity, rather than mere niceties. Companies must now justify their remuneration strategies to their employees, stakeholders, and regulatory bodies. Reputable executive compensation surveys will provide the data needed to make these justifications.

Difficulties Onboarding Qualified Executives

The increasing complexity of business operations in the global economy and the need for specialised skills have made attracting top-tier executives more challenging. Organisations now recognise that to attract and retain the best talent, they must offer compensation packages that are not only financially appealing, but also meet broader industry trends, drive the right behaviours and meet shareholder expectations.

Decoding Remuneration Data: Key Components and Metrics

Executive compensation on face value is complex. To navigate this difficulty, remuneration data must meticulously gather a wide array of information, dissecting every facet of executive pay to provide a holistic view of the compensation ecosystem.

The types of data collected encompass various components, including:

  • Fixed Remuneration: Typically a consistent and predictable component of an employee’s earnings, unaffected by performance metrics or external factors.
  • Target and Stretch Short-Term Incentive: Pre-defined performance-based variable pay, set as objectives for employees to achieve within a short, most often annual, timeframe. Typically, executives are communicated both a target and a stretch amount.
  • Target and Stretch Long-Term Incentive: Aimed at fostering long-term commitment, these incentives are linked to the company’s future performance, stock valuation, or other broader metrics, rewarding sustained employee contribution. Typically, executives are communicated both a target and a stretch amount.
  • Other Service Equity grants: A prevailing trend paid either as a sign-on award or a retention award used as a measure to either attract or retain key individuals.

Key totals and subtotals of the above information enable the practitioner to devise an appropriate remuneration package.

The Executive Remuneration Survey (ERS) by GRG is meticulously designed to provide data that addresses the specific requirements of Australian remuneration committees, boards, and HR professionals. It offers a detailed and comprehensive survey of market remuneration practices, targeting both executive and general manager roles within Australia.

Expertly blending publicly disclosed executive key management personnel (KMP) remuneration data with internally gathered information from over 60 executive and general manager positions, the ERS delivers in-depth and detailed insights into compensation components and the intricacies of variable pay plan metrics.

In a market where talent retention is as crucial as attraction, having a clear benchmark of your organisation’s executive pay is invaluable. It enables companies to strategically position their compensation packages, not just to be competitive but compelling and aligned with industry best practice and shareholder expectations. GRG’s commitment to client needs guarantees the quality and completeness of the data available, providing you with reliable and trustworthy information for your decision-making processes.

Integrating Survey Findings into Business Strategy

GRG provides key insights that enable businesses to navigate the complex terrain of executive talent management with informed confidence.

The data from the ERS offers a clear picture of the current remuneration climate, enabling businesses to set competitive yet sustainable pay structures that not only attracts, but retains, top talent. The alignment is also critical in demonstrating to stakeholders the commitment to fair and performance-oriented pay practices.

In today’s talent market, offering a competitive salary is a baseline; the differentiator often lies in the structure and composition of the entire compensation package. Surveys provide detailed insights into industry trends, helping companies tailor remuneration packages to attract top-tier executives to help drive company performance, by leveraging short-term and long-term incentive plan design (for example).

By understanding the evolving standards and expectations in executive compensation, organisations can proactively adjust their remuneration policies to help retain high-performing executives once onboarded. Talent turnover can be damaging to a company’s execution on strategic plans. By keeping up to date with market remuneration rates and pay mix, a company can ensure compensation packages remain attractive and relevant.

Integrating remuneration survey findings into a broader business strategy enables companies to create a symbiotic relationship between their pay structures and objectives. It’s about crafting a compensation narrative that resonates with executives’ expectations, aligns with market trends, and supports the organisation’s and shareholders’ long-term vision.

GRG’s Unique Approach to Executive Compensation Surveys

GRG offers industry-leading executive compensation survey resources with comprehensive remuneration data, expert analysis, and tailored advisory services. The methodology is grounded in an extensive database, encompassing over 1,000 companies and thousands of roles, making it one of the most detailed in Australia.

The centrepiece of GRG’s product offerings is the Executive Remuneration Survey (ERS). Designed specifically for the Australian market, it meticulously merges executive key management personnel (KMP) remuneration data with company-collected information for over 60 executive and general manager roles. Such an approach yields an in-depth understanding of pay structures, offering clients a clear picture of market trends and competitive pay metrics, and ensuring informed decision-making.

Beyond mere data, GRG’s strength lies in its consulting services and advisory reports. These reports go beyond standard data analysis, offering bespoke recommendations based on custom market modelling and role relationship assessments. GRG’s team of seasoned consultants works closely with clients, providing clear, actionable insights tailored to specific business needs.

GRG’s suite of services also addresses broader aspects of remuneration strategy, such as performance and reward vision, gender pay gap analysis, and the drafting and executing of board equity plans. These comprehensive solutions ensure that clients receive the most relevant data and strategic guidance to align their compensation packages with company objectives and stakeholder expectations.

Empowering Your Business Decisions

In today’s fast-paced and ever-evolving business world, making informed and strategic decisions is the secret to securing success.

The GRG Executive Remuneration Survey is designed to empower businesses with actionable insights, becoming more than just a tool but a gateway to transformative decision-making. Our ERS offers a comprehensive analysis of current remuneration trends, deep insights into the dynamics of executive pay structures, and direct intelligence to help businesses attract, retain and engage top-tier leadership talent. In a competitive market, you don’t want to miss the opportunity to transform your strategic decision-making with GRG.

Discover how GRG’s Executive Remuneration Survey can transform your operations. Contact us today to learn more.