Say-on-pay put a spotlight on executive remuneration of listed companies. The Guide shall support the members of the supervisory board and the members of a remuneration committee to comply with their duties imposed upon them.
First round of say-on-pay votes
The first round of say-on-pay votes in shareholders’ meeting of Austrian issuers is well under way with a bunch of issuers holding shareholders’ meetings after the summer due to Covid-19.
Investor focus on pay-for-performance alignment
There is a strong investor focus on executive remuneration with pay-for-performance alignment as one of the core underlying principles as well as emphasis on long-term shareholder value. Executive remuneration is one of the key instruments for companies and shareholders to align their interests with those of the executives.
ESG-related metrics ahead
With the increased focused of institutional investors on comparable and decision-relevant ESG disclosures, it can be expected that also ESG-related metrics may gain further momentum in remuneration programs moving from limited weight qualitative short-term performance component to long-term incentive plans given the necessarily long-term view on sustainability.
For the ESG focus of investors see notably BlackRock (please refer to the letter of Larry Fink (CEO of BlackRock) to CEOs) and State Street (please refer to the CEO’s Letter on the 2020 Proxy Voting Agenda of State Street) on comparable and decision-relevant ESG disclosures. In January 2020 the World Economic Forum released a Consultation Draft of common ESG metrics for investor communications highlighting the growing pressure for disclosure of ESG metrics (please refer to Toward Common Metrics and Consistent Reporting of Sustainable Value Creation).
bpv Huegel’s corporate and executive compensation specialists, Christoph Nauer, Florian Plattner, Daniel Reiter, Roland Juill and Barbara Valente, pulled together the Guide which covers:
- Corporate bodies responsible for executive remuneration
- Decision making process on remuneration matters by the supervisory board and committees
- Remuneration Policy
- Consideration on proxy advisors
- Overview of remuneration conponents and concepts for executives
- Statistics on executive board remuneration (ATX, Prime Market)
Guide on Remuneration Policy – Say-on-Pay on Executive Remuneration in Austria